Dollar Little Changed Despite Strong Employment Report
Washington (Jan 8) The highly anticipated US jobs report for December has had a surprisingly small impact on the dollar. The US currency is trading modestly higher against the Euro and the Japanese Yen and is solidly higher against the British pound.
Employment in the US increased by much more than expected in the month of December, according to a report released by the Labor Department on Friday. The Labor Department said non-farm payroll employment climbed by 292,000 jobs in December compared to economist estimates for an increase of about 200,000 jobs.
The Labor Department also said the unemployment rate held at a more than seven-year low of 5.0% in December, matching expectations.
The strong jobs data seems to have spooked investors, who are now concerned that the strong data will accelerate the Fed's tightening cycle.
Meanwhile, wholesale inventories in the US unexpectedly decreased in the month of November, according to a report released by the Commerce Department on Friday. The Commerce Department said wholesale inventories fell by 0.3% in November, matching the revised drop seen in October.
Economists had expected inventories to come in unchanged compared to the 0.1% dip originally reported for the previous month.
The dollar hit a high of USD1.0854 against the Euro after the jobs report was released, but has since eased back to around USD1.09 .
Germany's industrial production decreased unexpectedly in November, preliminary figures from Destatis showed Friday. Industrial production fell a seasonally and working-day-adjusted 0.3% month-over-month in November, confounding economists' expectations for a 0.5% rise.
Germany's exports and imports recovered in November from October, data from Destatis showed Friday. Exports rose 0.4% in November from October, when it fell 1.3%. Likewise, imports grew 1.6% reversing a 3.2% drop in October.
Economists had forecast exports to grow 0.5% and imports to improve 1%.
As growth in imports outpaced export growth, the trade surplus dropped to a seasonally adjusted EUR 19.7 billion from EUR 20.5 billion .
French industrial production declined more than expected in November largely due to a fall in mining output, figures from the statistical office Insee showed Friday. Industrial output decreased 0.9% from October when it grew 0.7%. Output was expected to drop moderately by 0.3%. A similar rate of decrease was last seen in July.
French foreign trade deficit decreased in November from a month earlier, as exports grew faster than imports, figures from the French Customs showed Friday. The trade deficit narrowed slightly to EUR 4.63 billion in November from EUR 4.9 billion in the preceding month. In the corresponding month last year, the shortfall was EUR 3.6 billion .
The buck has surged to over a 5-year high of USD1.4520 against the pound sterling this afternoon, from around USD1.4620 this morning.
The UK visible trade deficit narrowed in November largely due to a decline in oil imports, the Office for National Statistics reported Friday. The deficit on trade in goods fell less-than-expected to GBP 10.6 billion from GBP 11.2 billion in October. Economists had forecast a deficit of GBP 10.5 billion .
The greenback reached a high of Y118.800 against the Japanese Yen after the release of the jobs report, but has since retreated to around Y117.725 .
Total labor cash earnings in Japan remained unchanged in November, defying economists' expectations for a steady rise, preliminary report from the Ministry of Health, Labor and Welfare showed Friday. Gross earnings showed no variations in November from a year ago, following a 0.7% hike in previous month. It was expected to remain stable at 0.7%.
The leading index for Japan , which measures the future economic activity, decreased as expected in November, preliminary figures from the Cabinet Office showed Friday. The leading index fell to 103.9 in November from 104.2 in the previous month. This was also came in line with consensus estimate. In September, the score was 102.4.
Source: AllianceNews
