Investing.com - The dollar rallied against the yen on Friday after a better-than-expected U.S. jobs report for October raised the possibility that the Federal Reserve may start to scale back its stimulus program before the end of the year.
USD/JPY advanced 1.01% to settle at 99.07, close to Thursday’s seven week high of 99.40. For the week, the pair was up 0.46%, the second straight weekly gain.
The U.S. economy added 204,000 jobs in October, the Department of Labor said Friday, significantly higher than the 125,000 expected by economists. The unemployment rate ticked up to 7.3% from an almost five year low of 7.2% the previous month.
The robust data indicated that the U.S. economy shrugged off the impact of the government shutdown and fuelled expectations that the Fed may start to reduce its USD85 billion-a-month asset purchase program as soon as next month.
The report came one day after official data showed that the U.S. economy grew at an annual rate of 2.8% in the three months to September, well above expectations for growth of 2%.
Elsewhere, the euro recovered from three week lows against the yen on Friday, but gains were held in check after the European Central Bank surprised investors with a rate cut.
EUR/JPY settled at 132.41 on Friday, up from Thursday’s three week lows of 131.20, but still ended the week 0.67% lower.
The ECB unexpectedly cut its benchmark interest rate from 0.5% to 0.25% on Thursday, in an attempt to safeguard the fragile economic recovery in the bloc. The decision came after data showed that the annual rate of euro zone inflation fell to a four year low of 0.7% in October.
ECB President Mario Draghi reiterated that euro zone borrowing costs will remain at their present or lower levels until conditions improve, indicating that further rate cuts are still possible.
Sentiment on the shared currency was also hit after ratings agency Standard & Poor’s cut France’s sovereign rating to AA from AA+ on Friday, warning that the economic reforms of the past year were not sufficient to lift growth.
In the week ahead, investors will be closely watching Thursday’s Senate hearing to confirm Janet Yellen as the first chairwoman of the Federal Reserve. Japan is to release preliminary data on third quarter growth.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, November 11
Japan is to release data on bank lending and the current account.
Tuesday, November 12
Japan is to release data on tertiary industry activity, a leading indicator of economic health.
Wednesday, November 13
Japan is to produce data on core machinery orders, a leading indicator of production.
Thursday, November 14
Japan is to release preliminary data on third quarter gross domestic product, the broadest indicator of economic activity and the leading measure of the economy’s health.
The U.S. is to release official data on the trade balance, the difference in value between imports and exports and the weekly report on initial jobless claims.
Friday, November 15
The U.S. is to round up the week with data on manufacturing activity in the New York region, as well as reports on industrial production and import prices.
USD/JPY advanced 1.01% to settle at 99.07, close to Thursday’s seven week high of 99.40. For the week, the pair was up 0.46%, the second straight weekly gain.
The U.S. economy added 204,000 jobs in October, the Department of Labor said Friday, significantly higher than the 125,000 expected by economists. The unemployment rate ticked up to 7.3% from an almost five year low of 7.2% the previous month.
The robust data indicated that the U.S. economy shrugged off the impact of the government shutdown and fuelled expectations that the Fed may start to reduce its USD85 billion-a-month asset purchase program as soon as next month.
The report came one day after official data showed that the U.S. economy grew at an annual rate of 2.8% in the three months to September, well above expectations for growth of 2%.
Elsewhere, the euro recovered from three week lows against the yen on Friday, but gains were held in check after the European Central Bank surprised investors with a rate cut.
EUR/JPY settled at 132.41 on Friday, up from Thursday’s three week lows of 131.20, but still ended the week 0.67% lower.
The ECB unexpectedly cut its benchmark interest rate from 0.5% to 0.25% on Thursday, in an attempt to safeguard the fragile economic recovery in the bloc. The decision came after data showed that the annual rate of euro zone inflation fell to a four year low of 0.7% in October.
ECB President Mario Draghi reiterated that euro zone borrowing costs will remain at their present or lower levels until conditions improve, indicating that further rate cuts are still possible.
Sentiment on the shared currency was also hit after ratings agency Standard & Poor’s cut France’s sovereign rating to AA from AA+ on Friday, warning that the economic reforms of the past year were not sufficient to lift growth.
In the week ahead, investors will be closely watching Thursday’s Senate hearing to confirm Janet Yellen as the first chairwoman of the Federal Reserve. Japan is to release preliminary data on third quarter growth.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, November 11
Japan is to release data on bank lending and the current account.
Tuesday, November 12
Japan is to release data on tertiary industry activity, a leading indicator of economic health.
Wednesday, November 13
Japan is to produce data on core machinery orders, a leading indicator of production.
Thursday, November 14
Japan is to release preliminary data on third quarter gross domestic product, the broadest indicator of economic activity and the leading measure of the economy’s health.
The U.S. is to release official data on the trade balance, the difference in value between imports and exports and the weekly report on initial jobless claims.
Friday, November 15
The U.S. is to round up the week with data on manufacturing activity in the New York region, as well as reports on industrial production and import prices.