Daily market report Dollar Drops Most in 8 Weeks as Jobs Data Cool Fed Taper Views - Germany’s Bonds Decline as ECB’s Draghi Fails to Reverse Selloff - Pound Approaches 7-Month High Versus Euro Before Osborne Speech The dollar fell the most in more than eight weeks after U.S. employers added fewer workers last month than forecast, damping speculation the Federal Reserve will cut bond purchases this month. The U.S. currency weakened versus a majority of its 16-most-traded counterparts after a Labor Department report showed payrolls rose by 169,000 in August, compared with a median forecast of 96 economists surveyed by Bloomberg that called for a 180,000 jobs gain. The U.S. jobless rate fell to 7.3 percent. Canada’s dollar rose to the highest level in more than two weeks as the nation added jobs last month at triple the pace forecast. Germany’s bonds fell this week, pushing 10-year yields to a 17-month high, as European Central Bank President Mario Draghi failed to convince investors interest rates will remain low amid global economic growth. Austrian, French and Dutch (GNTH10YR) 10-year yields all climbed to the highest in more than a year as most government bond markets across the euro region tumbled along with Treasuries. Draghi said the ECB “expects the key ECB interest rates to remain at present or lower levels for an extended period of time,” at a press conference in Frankfurt on Sept. 5. Reports showed manufacturing in the euro area and China expanded last month. The ECB kept its benchmark interest rate at a record-low 0.5 percent at its Sept. 5 meeting as Draghi said risks to the region’s economic outlook remain on the downside. A euro-area index based on a survey of purchasing managers in the manufacturing industry increased to a 26-month high of 51.4 from 50.3 in July, Markit Economics said on Sept. 2. A gauge of Chinese manufacturing advanced to 50.1 last month from 47.7 in July. Readings above 50 signal expansion. The pound was little changed versus the euro and dollar before U.K. Chancellor of the Exchequer George Osborne delivers a speech today in which he will promise to stick to the government’s austerity plan. Sterling was within 0.4 percent of its strongest level versus the euro in more than seven months before a report on Sept. 11 economists said will show jobless claims fell last month. Unemployment in July held at 7.8 percent, according to a separate Bloomberg survey, above the Bank of England’s 7 percent threshold for assessing interest rates. The pound was at 84.25 pence per euro at 8:10 a.m. London time. It appreciated to 83.92 pence on Sept. 6, the strongest level since Jan. 24. The U.K. currency was at $1.5646. The pound has risen 7.3 percent in the past six months, the best performer among 10 major currencies tracked by Bloomberg Correlation-Weighted Indexes. The dollar gained 1.8 percent and the euro advanced 3.3 percent. U.K. government bonds lost 4.5 percent this year through Sept. 6, according to Bloomberg World Bond Indexes. German securities dropped 2.6 percent and Treasuries declined 4 percent, the indexes show. Have a good day!
Posted on: Mon, 09 Sep 2013 10:35:27 +0000
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