US Payroll Data Holds Euro and Dollar Back

Posted August 07, 2010

The US dollar and euro fall against yen. Investors are waiting for data on US payrolls.


During the currency trading session on Thursday, both the US dollar and the euro fell against the yen. Investors turned to the safety believed to be present in the yen as a way of holding off on investments that are riskier, until more information about the US economy can be obtained.

US Data

The euro and the US dollar fell as disappointing data about the US jobs weekly report. Investors are concerned that an economic recovery in the US may be slowing. The euro was able to come off slightly higher against the US dollar, as investors turned to caution as they waited for the US nonfarm payroll data to be released on Friday. It was the numerous recent economic reports out of the US that seemed to hold investors back. Investors remained concerned that a lower economic improvement by the US economy could result in the Federal Reserve pushing more federal stimulus into the country, further lowering the value of the dollar.

The nonfarm payroll data out on Friday is one of the strongest gauges of the US economy. It is thought to be one of the best ways to determine if the economy is improving. This data will inform investors if it is likely that the Federal Reserve will need to pump stimulus into the country or not. Investors are hoping and waiting for the Federal Reserve to offer some type of normalization of monetary policy.

Australian Dollar and New Zealand Dollar

As with most situations when there is information about the economy, the Australian dollar and the New Zealand dollar reacted during the day Thursday. Both of these currencies are considered growth sensitive. Both fell against the US dollar as investors moved from these currencies to more caution. 

Euro Zone Meeting

Most investors were more concerned with potential economic data out of the US during the trading session than with the meetings of the European Central Bank and the Bank of England, both of which occurred during the trading day. Both federal banks left key lending rates unchanged. European Central Bank President Jean Claude Trichet made a statement that while the euro zone’s growth in the first portion of the year and especially in the second quarter, was better than expected, that growth may be less buoyant in the second portion of the year. 

By The Numbers

During the currency trading session on Thursday, the euro moved from US $1.3169 as of late Wednesday to US $1.3186 at the end of trading in New York. The currency managed to move to an intraday high of US $1.3236 but these numbers fell as investors turned to caution.

The euro moved from Y 113.65 on Wednesday to Y 113.16. The US dollar moved from Y 86.30 to Y 85.74. The US dollar moved from CHF 1.0523 to CHF 1.0523. The UK pound moved from US $1.5901 to US $1.5884 during the trading day. The ICE Dollar Index moved the US dollar from 80.938 to 80.766.