The U.S. dollar maintained its bullish momentum, continuing to trade at 15-month highs against the Euro ahead of this morning’s economic data that is expected to show employers in the U.S. added the most jobs in three months. Despite an up tick in the price of crude oil, the greenback found support versus the Canadian dollar after a government report showed employers added fewer jobs in December than economists forecast and the unemployment rate rose for a third straight month. In the U.S., Non-farm payrolls registered at 200K, versus an expectation of 155K. In addition, the unemployment rate fell to 8.5% in December from a revised 8.7% the month prior. The rate declined to almost a three-year low showing that the labor market gained momentum heading into 2012. The U.S. dollar has gained following the positive data, even as U.S. equity futures have extended their gains. Expect the U.S. dollar to trade in choppy ranges today as the currency attempts to break through major resistance levels against its counterparts.
The Euro retreated versus the U.S. dollar, pushing to its lowest level in over a year following the release of poor economic data for the 17-nation region. The European Commission reported its index of executive and consumer sentiment in the euro area declined to 93.3 in December from a revised 93.8 in the previous month. The unemployment rate for the Euro zone held at 10.3% in November, a separate report showed. Meanwhile, German factory orders, adjusted for seasonal swings and inflation, slipped 4.8% in November from the prior month, when they increased by 5.0%. The print marked the biggest drop since January 2009. Next week, German Chancellor Angela Merkel will meet French President Nicolas Sarkozy in Berlin to talk about increasing fiscal coordination among euro-area states before the European Union leaders’ summit at the end of the month.
The Japanese yen remained in a tight range against the U.S. dollar but traded close to its highest level in 11 year versus the Euro. Japanese Finance Minister Jun Azumi said today he understands the weakening of the euro against the yen will have a significant impact on the companies that export their goods to the region. Japan sold the yen three times last year as its strength derailed an export-led recovery.
The British pound slumped against the U.S. dollar but continued its favorable ranges against the Euro. The sterling fell after a report from Halifax said Britain’s property market faces an “uncertain” year after a weakening economic recovery dragged house prices to their lowest level in 2 ½ years. Values dropped 0.9% to an average 160,063 pounds last month, the cheapest since July 2009. Values have fallen 2.2% from a year ago.
