News Column

Dollar Slips After Weak Jobs Data

August 1, 2014

CANBERA (Alliance News) - The US dollar slipped against its major opponents on Friday, as the US jobs data for July fell short of expectations, raising hopes that the US Federal Reserve may keep its accommodative monetary policy stance for sometime.

The report released by the Labor Department showed that US jobs growth slowed in July, while unemployment rate rose.

The US non-farm payroll employment increased by 209,000 jobs in July after jumping by an upwardly revised 298,000 in June. Economists had been expecting employment to climb by about 233,000 jobs

Meanwhile, the unemployment rate unexpectedly edged up to 6.2% in July from a nearly six-year low of 6.1% in June.

Personal income and spending in the US increased in line with economist estimates in the month of June, according to a report released by the Commerce Department. The report said personal income increased by 0.4% in June, matching the increase seen in the previous month as well as economist estimates. The personal spending also rose by 0.4% in June following an upwardly revised 0.3% increase in May.

The greenback extended decline to a 3-day low of 0.9051 against the Swiss franc, down by 0.5% from an early high of 0.9096. The next possible support for the greenback is seen around the 0.90 mark.

The greenback pulled back from an early 2-day high of 103.02 against the Yen, falling to a 2-day low of 102.64. The greenback is likely to test support around the 102.00 level.

Manufacturing activity in Japan expanded at a slower pace in July as output contracted, results of a survey by Markit Economics showed.

The Markit/JMMA purchasing managers' index, or PMI, fell to 50.5 in July from 51.5 in June, indicating weakened activity though the index remained above the no-change mark of 50.

The greenback fell to 1.3432 against the euro, its weakest since July 29. Continuation of bearish trend may take the greenback to a support around the 1.35 zone. The pair was valued at 1.3389 at Thursday's close.

Eurozone manufacturing activity growth remained stable at June's seven-month low, final data from Markit Economics showed.

The final seasonally adjusted manufacturing Purchasing Managers' Index came in at 51.8 in July, unchanged from June. The flash score for July was 51.9.

The greenback eased back to 1.6860 against the pound, after having advanced to a 1-1/2-month high of 1.6811 at 8:25 am ET. The pound-greenback pair ended yesterday's trading at 1.6882. Next key support for the greenback is seen around the 1.69 region.

U.K 's manufacturing activity expanded at a slower than expected rate in July, the results of a survey by Markit Economics and the Chartered Institute of Purchasing and Logistics showed.

The Makit/CIPS manufacturing purchasing managers' index, or PMI, decreased to 55.4 in July from 57.2 in June. Economists expected the index to come in at 57.2.

Easing from an early 2-month high of 0.9275 against the Australian dollar, the greenback fell to 0.9325 when the data came out. The pair's yesterday's closing value was at 0.9292. The greenback may challenge support around the 0.94 mark.

The greenback slipped to a 3-day low of 0.8522 against the NZ dollar, moving away from nearly a 2-month high of 0.8461 hit in prior deals. On the downside, 0.86 is seen as next likely support level for the greenback.

The greenback edged down to 1.0896 against the loonie, after climbing to near a 2-month peak of 1.0943 at 5:50 am ET. Further weakness may take the greenback to a support around the 1.08 level. The greenback-loonie pair was worth 1.0904 when it closed deals yesterday.

Looking ahead, the Reuters/University of Michigan's final consumer sentiment index and ISM manufacturing for July, and construction spending for June are to be released shortly.

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Source: Alliance News

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