Euro Plunges on Trichet
by Korman Tam
The dollar rallied sharply against the euro in New York trading, rebounding from 1.5908 to beneath the 1.57-level at 1.5683. Ahead of a long weekend holiday in the US, traders digested a barrage of economic events earlier in the session prompting a sharp reversal in the euro from its 2 ½-month highs, falling by over 2 big figures.
The closely watched US labor report was largely inline with expectations, with the June non-farm payrolls slightly above forecast at -62k, from -49k. Meanwhile, the unemployment rate in June was higher than expected at 5.5% and unchanged from the previous month. Despite further losses in non-farm payrolls, the dollar found some respite since markets were preparing for an even greater loss of jobs following yesterday's unexpectedly disappointing ADP private-sector payrolls report, which declined by 79k. The June non-manufacturing ISM report missed consensus estimates, dipping beneath the key 50-level which distinguishes between contraction and expansion, to 48.2 versus calls for a smaller decline to 51.0 from 51.7.
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