US Dollar Struggles As Jobs Data Released

Posted July 04, 2010

During the currency trading session on Friday, the Us dollar fell modestly against the euro. Jobs data was behind moves.


US Economic Status

As currency experts looked at the US for more economic data to better determine what is occurring within the country’s economy, the US dollar’s value fell, for the second day. The news on US jobs data released on Friday was not good and further worried investors who are looking for signs of a stalling economic recovery. Many investors are questioning the pace at which the US economy is recovering. 

However, the negative news about the US economy did not cause the US dollar to fall significantly. Most investors continued their trends that they were using prior to the release of the data. It is important to note that North American trading was significant lower in volume during the Friday session as many investors were looking towards the long July Fourth weekend in the United States and Canada Day in Canada. Investors remarked that the US jobs data was not terrible, but it will make it hard for the US dollar and the economic outlook in the near future. 

Nonfarm payrolls in the use fell by 125,000 in June, as 225,000 government workers were hired for the census creating temporary jobs. This shows that only 83,000 private sector jobs were added in the month.

The Euro

The negative aspects on the US economy in general are causing the euro to improve. While investors are still cautious in regards to the euro zone debt crisis and economic concerns, the euro did manage to have a positive week. The euro improved by 1.2 percent for the last week. However it is still 12.4 percent down against the US dollar since the beginning of 2010. 

Also noteworthy is that speculative bets against the euro have increased in the last week, ending Tuesday, says experts. Also, anti euro bets, which are known as shorts, also improved. They increased to a net value of US $11.2 billion. This is up from the US $10.9 billion the value stood at the previous week. As concerns over the euro zone have fallen among investors, many have unwound their bets against the euro. This has helped the euro to improve significantly over the last few days.

By The Numbers

The euro did manage to move over the key US $1.26 mark during the trading session on Friday. However, it fell off at that point during the afternoon trading session. Most other currencies remained in tight ranges as well.

By the end of the trading day on Friday, the euro had moved from US $1.2515 as of Thursday to US $1.2543. The euro moved from Y 109.58 to Y 109.96. The US dollar moved from CHF 1.0611 to CHF 1.0648. The UK pound moved from US $1.5180 to US $1.5185 during the trading day. The ICE Dollar Index moved the US dollar from 84.534 to 84.478 for the day. This move was specifically pared against the news from payrolls data in the US. That data led to this index falling to its lowest level since May before it was able to improve slightly.