Investing.com - The dollar turned broadly lower against the other major currencies on Friday after disappointing U.S. employment data saw investors reassess expectations over the timing of a pullback in the Federal Reserve’s stimulus program.
The Department of Labor said the U.S. economy added 169,000 jobs in August, fewer than the 180,000 forecast by economists.
The unemployment rate ticked down to a four-and-a-half year low of 7.3% from 7.4% in July, but this was partially due to more people dropping out of the labor force.
The report also said that job growth in July was revised down to 104,000 from 162,000, while June’s figure was revised down to 172,000 from 188,000.
The dollar came under pressure amid renewed uncertainty over whether the Fed will start to unwind its USD85 billion-a-month asset purchase program at its upcoming policy meeting on September 17-18. Fed Chairman Ben Bernanke has said that the decision to begin tapering will depend on whether economic data is strong enough.
The euro recovered from seven week lows against the dollar following the report, with EUR/USD rising 0.47% to 1.3181 at the close of trade, paring the week’s losses to just 0.07%.
The dollar was sharply lower against the yen, with USD/JPY falling as low as 98.53, the lowest since September 2, before trimming losses to settle at 99.10, down 0.98% for the day and ending the week 0.47% lower.
The pound hit two-week highs of 1.5681 against the dollar before paring gains to settle at 1.5627, 0.26% higher for the day and 0.55% higher for the week. The dollar was also weaker against the Swiss franc, with USD/CHF down 0.81% to 0.9374 at the close, trimming the week’s gains to 0.28%.
Safe haven demand for the yen and the Swiss franc was supported amid ongoing tensions over possible military intervention against Syria. On Friday Russian President Vladimir Putin warned the U.S. against launching military action against the Syrian government without U.N. approval.
Earlier in the week, stronger-than-expected manufacturing data out of China, the U.K. and the euro zone had bolstered optimism over a broad based global recovery and propelled the dollar to multi-week highs against the yen and the euro.
In the week ahead, the dollar looks likely to remain under pressure ahead of the outcome of the Fed’s upcoming policy meeting later in the month.
Investors will be looking ahead to Friday’s U.S. data on retail sales and consumer sentiment for indications on the strength of the economic recovery.
An interest rate decision by the Reserve Bank of New Zealand will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, September 9
Japan is to release data on the current account and bank lending as well as revised data on second quarter gross domestic product, the broadest indicator of economic activity and the leading indicator of economic health.
Australia is to release data on job advertisements and home loans.
Meanwhile, China is to produce data on consumer price inflation, which accounts for the majority of overall inflation.
Switzerland is to publish data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity, as well as data on the unemployment rate.
Later Monday, Canada is to publish government data on building permits, a leading indicator of future construction activity.
Tuesday, September 10
The Bank of Japan is to release monetary policy meeting minutes, which provide insights into economic conditions from the bank’s perspective. Japan is also to produce data on tertiary industry activity.
Australia is to release private sector data on inflation expectations and business confidence.
China is to publish data on fixed asset investments and industrial production.
In the U.K., Bank of England Governor Mark Carney and monetary policy committee members are to testify on the inflation and economic outlook before the Treasury Select Committee.
Wednesday, September 11
Japan is to publish the BSI manufacturing index. Meanwhile, Australia is to produce private sector data on consumer sentiment.
The U.K. is to release government data on the change in the number of people unemployed, the overall unemployment rate and average earnings.
Thursday, September 12
The RBNZ is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision. The bank is to hold a press conference after the rate announcement.
Australia is to produce official data on the change in the number of people unemployed and the unemployment rate.
Japan is to release official data on core machinery orders, a leading indicator of production.
The European Central Bank is to publish its monthly bulletin, which outlines the bank’s economic outlook. The euro zone is to publish data in industrial production.
Canada is to release official data on new house price inflation, an important indicator of demand in the housing sector.
The U.S. is to release the weekly government report on initial jobless claims, a leading economic indicator, as well as official data on import prices.
Friday, September 13
New Zealand is to release private sector data on manufacturing activity.
Switzerland is to release data on producer price inflation.
The U.S. is to round up the week with reports on retail sales and producer price inflation, as well as preliminary data from the University of Michigan on consumer sentiment.
The Department of Labor said the U.S. economy added 169,000 jobs in August, fewer than the 180,000 forecast by economists.
The unemployment rate ticked down to a four-and-a-half year low of 7.3% from 7.4% in July, but this was partially due to more people dropping out of the labor force.
The report also said that job growth in July was revised down to 104,000 from 162,000, while June’s figure was revised down to 172,000 from 188,000.
The dollar came under pressure amid renewed uncertainty over whether the Fed will start to unwind its USD85 billion-a-month asset purchase program at its upcoming policy meeting on September 17-18. Fed Chairman Ben Bernanke has said that the decision to begin tapering will depend on whether economic data is strong enough.
The euro recovered from seven week lows against the dollar following the report, with EUR/USD rising 0.47% to 1.3181 at the close of trade, paring the week’s losses to just 0.07%.
The dollar was sharply lower against the yen, with USD/JPY falling as low as 98.53, the lowest since September 2, before trimming losses to settle at 99.10, down 0.98% for the day and ending the week 0.47% lower.
The pound hit two-week highs of 1.5681 against the dollar before paring gains to settle at 1.5627, 0.26% higher for the day and 0.55% higher for the week. The dollar was also weaker against the Swiss franc, with USD/CHF down 0.81% to 0.9374 at the close, trimming the week’s gains to 0.28%.
Safe haven demand for the yen and the Swiss franc was supported amid ongoing tensions over possible military intervention against Syria. On Friday Russian President Vladimir Putin warned the U.S. against launching military action against the Syrian government without U.N. approval.
Earlier in the week, stronger-than-expected manufacturing data out of China, the U.K. and the euro zone had bolstered optimism over a broad based global recovery and propelled the dollar to multi-week highs against the yen and the euro.
In the week ahead, the dollar looks likely to remain under pressure ahead of the outcome of the Fed’s upcoming policy meeting later in the month.
Investors will be looking ahead to Friday’s U.S. data on retail sales and consumer sentiment for indications on the strength of the economic recovery.
An interest rate decision by the Reserve Bank of New Zealand will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, September 9
Japan is to release data on the current account and bank lending as well as revised data on second quarter gross domestic product, the broadest indicator of economic activity and the leading indicator of economic health.
Australia is to release data on job advertisements and home loans.
Meanwhile, China is to produce data on consumer price inflation, which accounts for the majority of overall inflation.
Switzerland is to publish data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity, as well as data on the unemployment rate.
Later Monday, Canada is to publish government data on building permits, a leading indicator of future construction activity.
Tuesday, September 10
The Bank of Japan is to release monetary policy meeting minutes, which provide insights into economic conditions from the bank’s perspective. Japan is also to produce data on tertiary industry activity.
Australia is to release private sector data on inflation expectations and business confidence.
China is to publish data on fixed asset investments and industrial production.
In the U.K., Bank of England Governor Mark Carney and monetary policy committee members are to testify on the inflation and economic outlook before the Treasury Select Committee.
Wednesday, September 11
Japan is to publish the BSI manufacturing index. Meanwhile, Australia is to produce private sector data on consumer sentiment.
The U.K. is to release government data on the change in the number of people unemployed, the overall unemployment rate and average earnings.
Thursday, September 12
The RBNZ is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision. The bank is to hold a press conference after the rate announcement.
Australia is to produce official data on the change in the number of people unemployed and the unemployment rate.
Japan is to release official data on core machinery orders, a leading indicator of production.
The European Central Bank is to publish its monthly bulletin, which outlines the bank’s economic outlook. The euro zone is to publish data in industrial production.
Canada is to release official data on new house price inflation, an important indicator of demand in the housing sector.
The U.S. is to release the weekly government report on initial jobless claims, a leading economic indicator, as well as official data on import prices.
Friday, September 13
New Zealand is to release private sector data on manufacturing activity.
Switzerland is to release data on producer price inflation.
The U.S. is to round up the week with reports on retail sales and producer price inflation, as well as preliminary data from the University of Michigan on consumer sentiment.