Major Currency Pairs Analysis: June 10, 2013

The dollar pulled away from a three month low against the euro on Friday, after official data showed that the U.S. economy added slightly more jobs than expected in May. The Department of Labor said the U.S. economy added 175,000 jobs last month, slightly more than the 170,000 gain forecast by economists. The unemployment rate ticked up to 7.6% from 7.5% in April. In the eurozone, official data indicated that German industrial production rose 1.8% in May, the largest increase in almost a year. In the week ahead, investors will be focusing on U.S. retail sales data and consumer sentiment for indications of economic recovery. The eurozone data on consumer prices will also be closely watched.
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GBP/USD
The pound was lower against the dollar on Friday, after official data showed that the U.S. economy added slightly more jobs than expected in May. The Department of Labor said the U.S. economy added 175,000 jobs last month, slightly more than the 170,000 gain forecast by economists. The unemployment rate ticked up to 7.6% from 7.5% in April. The data reassured investors that the U.S. economic recovery is continuing, but not strongly enough for the Federal Reserve to begin tapering off its USD85 billion-a-month asset purchase program. In the week ahead, investors will be focusing on U.S. retail sales data and consumer sentiment for indications of economic recovery. The eurozone data on consumer prices will also be closely watched.
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USD/JPY
The dollar recovered from two-month lows against the yen on Friday after official data showed that the U.S. economy added slightly more jobs than expected in May. The Department of Labor said the U.S. economy added 175,000 jobs last month, slightly more than the 170,000 gain forecast by economists. The unemployment rate ticked up to 7.6% from 7.5% in April. The dollar posted the largest one-day decline against the yen in three years on Thursday, dropping 2.1% after weaker-than-expected private sector jobs data lowered expectations for a strong economic recovery. Payroll processor ADP said non-farm private employment rose by a seasonally adjusted 135,000 last month, below expectations for an increase of 165,000. The yen was also boosted after a speech by Japanese Prime Minister Shinzo Abe on strategies to spur economic growth undershot market expectations. In the week ahead, investors will be focusing on U.S. retail sales data and consumer sentiment for indications of economic recovery. The outcome of Tuesday’s BoJ meeting will also be closely watched.
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USD/CAD
the greenback fell against the Canadian dollar, with USD/CAD dropping 0.64% to 1.0197 after official data showed that the Canadian economy added a larger than expected 95,000 jobs in May, the biggest increase in more than a decade. The dollar gained ground against the other major currencies on Friday, after stronger-than-expected jobs data for May renewed expectations that the Federal Reserve may begin to unwind its asset purchase program. The Department of Labor said the U.S. economy added 175,000 jobs last month, slightly more than the 170,000 gain forecast by economists.
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