Edited by Vani Rao
USD gains fuelled by upbeat job data and fall in jobless claims
The US dollar edged higher against the euro on Friday, July 4, 2014, after a better-than-expected US employment report for July eased concerns over the outlook for economic recovery. On Friday, the US Labor Department reported that the US economy added 288,000 jobs last month, well above expectations of a job growth of 212,000. The unemployment rate ticked down to 6.1% from 6.3% in May, the lowest in almost six years.
The EUR/USD ended 0.35% lower at 1.3595 on Friday, July 4, 2014. The euro came under pressure after the European Central Bank (ECB) announced that a revision of interest rates will remain on hold at present and the current low levels will continue for an extended period.
At the time of last reporting, the EUR/USD pair was trading at 1.3587, down 0.06%.
In the forthcoming week, the UK and the US are scheduled to report a series of key data. Currency experts will keep a close watch on the following data releases while framing their trading strategies.
On Tuesday, July 8, 2014, in the Eurozone, Germany is expected to release data on the trade balance, the difference in value between imports and exports.
On Wednesday, July 9, 2014, the Federal Reserve is to publish the minutes of its July meeting.
On Thursday, July 10, France is expected to release data on consumer prices and industrial production, while the ECB is to publish its monthly bulletin. Meanwhile, the US is to release the weekly government report on initial jobless claims.
On Friday, July 11, Spain is expected to publish revised data on consumer inflation.
The GBP reached close to six-year highs on Friday, July 4, 2014. This was mainly because expectations of a rate hike by the Bank of England (BoE) this year continued to underpin demand for the GBP. The GBP/USD pair ended at 1.7160, after hitting 1.7178, the highest since October 2008. The pair oscillated between 1.7040 and 1.7160 during the same day.
The GBP has made strong gains since the beginning of this year, gaining more than 15% against the dollar amid expectations that the deepening UK recovery will prompt the BoE to raise rates before the end of the year.
At the time of last reporting, the GBP/USD pair was trading at 1.7144, down 0.09%.
In the forthcoming week, the UK and the US are scheduled to report series of key data. Currency experts will keep a close watch on the following data releases while framing their trading strategies.
On Tuesday, July 8, the UK is scheduled to release data on manufacturing and industrial production.
On Thursday, July 10, the UK is expected to release data on trade balance, while the BoE is slated to announce its benchmark interest rate. Meanwhile, the US is expected to produce its weekly government report on initial jobless claims.
The US dollar posted marginal losses against the Japanese yen on Friday, July 4, 2014. However, the dollar ended the week higher as a better-than-expected US non-farm payrolls report for June bolstered the outlook for the wider economic recovery.
During the session, the USD/JPY pair finished at 102.06 late Friday, off Thursday’s high of 102.25, as shown in the graph below. However, for the week ended July 4, 2014, the pair mapped gains of 0.62%.
At the time of final reporting, the USD/JPY pair was trading at 102.15, up 0.08%.
The USD/JPY pair is likely to fluctuate ahead of significant data releases by Japan in the coming week. Industry experts will look forward to changes in the relative price of the US and the Japanese yen in the coming week, ahead of key data releases.
On Tuesday, July 8, 2014, Japan is scheduled to release a report on its current account.
On Thursday, July 10, Japan is expected to publish data on core machinery orders and tertiary industry activity. Meanwhile, the US is scheduled to produce its weekly government report on initial jobless claims.