The U.S. dollar was largely unchanged against the majority of its major counterparts as traders awaited the U.S. jobs report this morning and global stocks seesawed. The greenback did gain versus its Canadian rival as Canada’s unemployment rate unexpectedly increased. The U.S. dollar has gained this morning as the U.S. economic docket bettered expectations. Employment climbed more than forecast in January and the U.S. jobless rate unexpectedly fell to the lowest level in three years. The 243K increase in jobs was the most since April and exceeded all forecasts in a Bloomberg survey, Labor Department figures showed in Washington. The unemployment rate fell to 8.3% from 8.5%, the lowest since February 2009. The data may boost the dollar in the medium term as the positive data may give the Federal Reserve the scope to keep its bond-purchase program in tact and not partake in another round of so-called quantitative easing. Later the Non-Manufacturing Composite is expected to expand to 53.2 from 52.6 in the month prior. Also factory orders are expected to rise 1.5% in December, from 1.8% in November.
The Euro remained largely unchanged overnight as the market braced for the release of the U.S. employment numbers, which came out overwhelmingly positive, sending equities higher. In Europe, Greek officials continue to haggle over the proposed debt-swap, now looking to impose at least a 70% loss for bondholders. The Euro-Zone PMI services and composite came in at the expected 50.4/50.3 this morning, as retail sales were worse than forecasted at –0.4% on the month, and –1.6% on the year. The poor retail sales in Europe combined with the positive U.S. employment numbers show a growing trend of divergence between the two currencies, proving to be very dollar positive. German and Italian PMI services fell from last month, while the French PMI services showed improvement.
The British pound fell nearly three tenths against the dollar following the fall in the U.S. unemployment rate to 8.3%. The sterling has remained largely unchanged against the euro, as talks heated up yesterday about the possibility of the Bank of England increasing its quantitative easing program an additional 75B, to 350B. U.K. PMI services increased from 54.0 in December to 56.0 in January, better than the expected 53.3.
