U.S Economic Fundamentals are Still Shaky
July 2nd, 2009 Posted in In-Depth Analysis
The ADP Non Farm Employment Change report, which was released Wednesday 12:30 GMT showed a worse than expected result of -473,000. This report is viewed as a good forecast for the Non-Farm Employment report released by the Bureau of Labor Statistics. The report indicates that the labor market is still in a state of decline.
Following the release of the report the USD intensified its losses versus the EUR. Up until recently negative data from the U.S was usually beneficial to the Dollar as investors turned to the safety of the currency. However, recently, negative economic indicators no longer provide support to the Dollar as investors associate these results with a deteriorating long term state of the currency. As uncertainty about the future of the American economy mount due to fears of extremely high budget deficit and rising inflation, the USD loses its safe haven appeal.
