US Dollar Drops to 15 Year Lows

Posted October 09, 2010

Poor US jobs data pushed the US currency to 15 year lows against yen. Fed likely to act soon.


US Jobs

The main factor playing a role in the currency trading session on Friday was the jobs data. The US dollar dropped to 15 year lows against the yen during the session, as speculative investors ramped up movement in the positive yen bets by as much as 72 percent. This all leads to the likelihood that the Federal Reserve in the US will likely act soon to stimulate the sagging economy. The jobs report out Friday indicates that there is a need for stimulation.

The jobs report was far weaker than what was expected. The US dollar fell to Y 81.72 during the day. This was a sign to investors to watch for the Japanese government to intervene to hold back the growth of the yen. However, there was no indication during the day that this occurred and the finance minister declined to comment. 

The US dollar also feel against other rivals, mostly due to the US jobs report which adds more credence to the likelihood that the Fed will begin a new round of asset purchases. 

Non farm payrolls out of the US showed a drop of 95,000 jobs. A forecast in the September US data expected a drop of just 10,000 jobs. 


The US dollar took back some of the losses it faced after the jobs loss against the euro. This came after the Eurogroup of finance ministers, including Jean Claude Juncker, made a statement that he believed that the euro was too strong and was not an accurate reflection of the economic fundamentals. That caused the euro to fall to a intraday low of US $1.3833. It had moved as high as US $1.3985 during the day. Investors stated that finance ministers are simply not happen that the euro moved as high as US $1.40 and were hoping to talk down the euro's strength.

By the Numbers

By the end of the trading session on Friday in New York, the euro had moved from US $1.3912 as of late Thursday to US $1.3929. The euro moved from Y 114.65 to Y 114.33. The US dollar moved from Y 82.40 to Y 82.08. The US dollar moved from CHF 0.9669 to CHF 0.9637. The UK Pound moved from US $1.5862 to US $1.5953. The ICE Dollar Index moved the US dollar from 77.464 to 77.255.