#Daily_market_report Dollar Heads for Weekly Gain as Jobs Spur Fed Rate Bets - Euro suffering 3 day decline as Draghi says rates will stay low - GBP/USD touched 1.7173. Is this the limit? The dollar headed for a weekly gain versus most of its Group of 10 peers as signs of an accelerating U.S. recovery spurred speculation the Federal Reserve will bring forward the timing of interest-rate increases. The greenback traded about 0.2 percent from a two-week high against the yen after nonfarm payrolls rose more than economists estimated and the unemployment rate fell to an almost six-year low. The U.S. currency fell 0.2 percent to 102.03 yen at 7:10 a.m. in London from yesterday, when it touched 102.27, the most since June 18. It fetched $1.3601 per euro from $1.3610. For the week, the greenback has risen 0.6 percent against the yen and 0.4 percent versus the euro. The 18-nation euro weakened 0.2 percent to 138.78 yen, though it’s still up 0.3 percent since June 27. U.S. Labor Department figures yesterday showed employers added 288,000 workers in June, more than the 215,000 median forecast of economists surveyed by Bloomberg News. The jobless rate dropped to 6.1 percent from 6.3 percent in May. Treasuries declined yesterday, while the Dow Jones Industrial Average (INDU) rose above 17,000 for the first time. Financial markets in the U.S. will be closed today for Independence Day. The U.S. central bank has trimmed monthly buying to $35 billion from $85 billion last year, while holding the key interest-rate target in a range of zero to 0.25 percent since 2008 to support the economy. The euro held a three-day decline as a report showed factory orders in Germany dropped more than estimated. br /> In Germany, Europe’s largest economy, factory orders decreased 1.7 percent in May from the previous month, when they rose 3.4 percent, the Economy Ministry in Berlin said today. The median estimate of economists in a Bloomberg poll was a decline of 1.1 percent. The European Central Bank kept the main refinancing rate at 0.15 percent at a policy meeting yesterday after a cut last month. President Mario Draghi reiterated that he’ll keep rates low as officials try to revive the economy. Draghi’s press conference started as U.S. data showed an improving labor market in the world’s largest economy. The euro slid half a cent to as low as $1.3596. In contrast, the single currency barely budged 45 minutes earlier when the ECB left the main refinancing rate at a record low of 0.15 percent and the deposit rate at minus 0.1 percent. The rate decisions were predicted by all economists surveyed by Bloomberg News. The ECB’s 24-member Governing Council is trying to stop inflation falling too low in an economy still struggling to recover from a debt crisis that threatened to blow the euro apart. Inflation in the bloc held at 0.5 percent in June, compared with the ECB’s goal of just under 2 percent. The rate has been below 1 percent every month since October. GBP/USD resumed growth after a short period of consolidation during late Asian hours; the pair aims at multi-year highs of 1.7177 reached on Wednesday, and the 1.7180 resistance. GBP/USD has been range-bound after a positive start of the week, but it seems that bulls have had enough rest and ready for a new assault as the pair took off from the opening level of 1.7150 and touched current Asian high at 1.7173. This is a pure technical play, as there are no fundamental factors that might have served as a trigger. GBP/USD is dangerously close to the important long-term resistance area of 1.7180. It is not going to be taken out easily, but sustained weekly close above this level might open up new horizons for long-term GBP bulls. Have a good day!
Posted on: Fri, 04 Jul 2014 08:42:27 +0000