Bad Jobs Data Pushes Dollar Down

Posted August 07, 2010

Disappointing jobs data causes Us dollar to fall significantly. Economy seems to be stalling.


During the Friday currency trading session, the US dollar fell significantly. All investor eyes were on the jobs report for the month of July which was released during the trading day. The US jobs report for July showed a poor picture of the jobs market in the country.

The US dollar moved to the lowest level it has had in 2010 against the yen. It is getting closer to a 15 year low against the yen, especially with changes on Friday. However, the euro managed to gain more steam during the day and rose to a three month high against the US dollar, to US $1.33. The UK pound also moved to an improved position against the US dollar, to its strongest point in six months.

US Data

There was no doubt that the US jobs data was the single most important factor during the trading session during the day. The week jobs numbers add to the other weak economic data out of the US. This is even more reason why the Federal Reserve may be forced into the position of announcing new measures to help kick start a potential double dip recession in the US. The Federal Reserve is set to meet on Tuesday, at which time it may announce new changes. Investors had hoped that the US bank would be working towards tightening up monetary policy but instead, it may be doing just the opposite. That would further push the value of the dollar down.

The economy shed more jobs in the month of July than economists had predicted. The unemployment rate in the country is steady at 9.5 percent. 

Canadian Dollar

Also notable during the trading session was that the Canadian dollar was the only one of the US dollar’s competitors that did fall against the US dollar during the trading session. This is due to the disappointing jobs data that came out of the Canadian government during the day’s trading. Investors turned away from the Canadian dollar as a result. The US dollar gained 1.25 percent against the Canadian counterpart during the day.

South Korean Won

Also notable was the changes in the South Korean won. The currency moved to a  two and a half month high. This occurred even though investors believed that the central bank intervened during the trading day. 

By The Numbers

At the end of the trading day on Friday in New York, the euro had moved from US $1.3186 as of late Thursday to US $1.3294. The euro rose to a three month high at US $1.334 during the day’s session, though it fell back some as the US stocks fell during the day. The euro moved from Y 113.16 to Y 113.48 during the day. The US dollar moved from Y 85.74 to Y 85.40. The US dollar moved from CHF 1.0475 to CHF 1.0377. The UK pound moved from US $1.5884 to US $1.5968. The ICE Dollar Index moved the US dollar from 80.766 to 80.317.