US Jobs Data Pushes Dollar Lower
During the Wednesday currency trading session, the euro pushed higher to eight month highs against the US dollar. The yen also continued its claim to near 15 year highs against the US dollar.
Many of the concerns in the marketplace stem for the unknown in terms of the Federal Reserve. Investors are unsure when and how the US Federal Reserve will take steps to prop up the US economy. The ICE Dollar Index pushed the US dollar from 77.749 as of late Tuesday to 77.397 by the end of trading on Wednesday. It hit an intraday trading low of 77.301.
One thing affecting the market was the release of the US private sector employment numbers which showed a drop of 39,000 in the month of September according to payroll company ADP. This was an unexpected drop since most economists believed they would see an increase of 20,000 jobs during the same period. This report is not as clear cut as the report due out on Friday from the US Labor Department, but it does place more concern on the jobs market, implying that it may be less positive than what others believed.
The euro continues to improve as investors turn to more risky assets in the hopes of turning a larger profit. It was up from US $1.3852 in late day trading on Tuesday to US $1.3934 by the end of trading on Wednesday. It had traded as high as US $1.3948 during the day, which is the highest the euro has traded against the US dollar since February. Investors believe that the euro's recent rally is sustainable, at least until additional information and news comes out of the Fed to consider investors. The euro was able to withstand the drop in Ireland's rating from A to AA- by Fitch as well.
Against the yen, the US dollar fell back farther as the yen soared once again. The US dollar high 15 year lows against the yen. It fell farther than the level that the US dollar was at when the Japanese officials stepped into the market to hold back the yen on September 15th.
Also important during the day's trading was the movements of the UK pound. The British currency moved from US $1.5908 as of late Tuesday to US $1.5895 by the end of the day on Wednesday.