- US non-farm payrolls fall 125,000; unemployment rate falls to 9.5% as discouraged workers abandon the search
- India raises interest rates 0-25% to cool inflation and inflation expectations
- Merkel: Eurozone has only bought itself time regarding the economic crisis; must consolidate budgets
- US factory orders fall 1.4% in May; much weaker than expected
- ESFS should be operable end-July, early August: EU source to Reuters
- S&P 500 rebound from lows, ends -0.5% at 1122
- US 10 year notes climb in yield, close at 2.98 from 2.91 intraday lows after NFP
- Oil falls $0.70 to $72.50
EUR/USD waited for the event risk associated with non-farm payrolls to pass and then went right on doing what it set out to do. Traders spent the week building in a very poor number and initially bought dollars when the report was merely bad not awful. It soon headed the other way though with EUR/USD pushing through 1.26 in short order. 1.2613 was the traded high.
Reports immediately circulated that China was an active seller above 1.2600, which helped cool the advance. We made one more stab at the 1.26 area at the 15:00 GMT fixing but prices soon began to ease lower as latecomers to the rally booked profits ahead of the weekend. EUR/USD found support in the 1.2530s on pullbacks in the afternoon.Looks like we’ve reopened a two-way street after one-way traffic until early this morning.
USD/JPY held up much better today with traders reporting order boards loaded up buy orders from japanese institutional investors. Jawboning to limit JPY strength is expected should we dip back onto an 86-handle next week. We end the day well supported, at 87.87.
GBP/USD’s rally stalled ahead of the sovereign sales Sean has been highlighting toward 1.5250. We reached 1.5229 shortly after the US data and end at 1.5205.
Commodity currencies were the big losers today as the US employment and factory orders reports reinforced the notion of a US economic slowdown. AUD fell to 0.8503 from post-payrolls highs of 0.8509 and ends the day at 0.8433. USD/CAD reached 1.0668 on US buying and ends the day at 1.0622.
