Friday, 7 Aug 2009

Dollar Rises on Non-Farm Employment Change Data

The dollar rose broadly today against the GBP and EUR, as a government report showed employers eliminated fewer jobs in July than economists forecast. The unemployment rate dropped for the first time since April 2008, the clearest signs yet that the worst recession is easing.

The GBP/USD pair slid by 100 pips today to 1.6680, as Britain released very disappointing PPI Input figures earlier today. The EUR/USD pair fell 160 pips to 1.4199, as traders flocked to the safe-haven Dollar. The yen also dropped against most of its major counterparts as the payroll report indicated a recovery in the world's largest economy, encouraging Japanese investors to buy higher-yielding assets overseas.

With the expectation of several major economic data, traders are likely to remain cautions heading to next week; therefore, it is unlikely to see a major reversal in the current bullish trend of the USD.