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Payrolls sink US further
By: Finotec - 04-02-2008
0votesUS non- farm payrolls declined 17K in January. The market was forecasting a 55000 increase in people employed excluding the farming industry
US non- farm payrolls declined 17K in January. The market was forecasting a 55000 increase in people employed excluding the farming industry, although most economists were ready for a stronger number after Wednesdays solid ADP report. This in hindsight was misleading and contributed to the first fall in payrolls since August 2003. US firms are holding back hiring in the current environment, but Fridays report is certainly worse than most expected.
If the economic data remains weak and the delivery of negative news from the financial sector continues, the FOMC will be expected to tackle sliding growth risks in a more forceful manner; as it has over the last two weeks.
The ISM staggered the market, rising to 50.7 in January from 48.4 in December (versus consensus of a fall to 47.3). The low dollar and healthy foreign demand for exports has sustained the manufacturing sector, amid the doom and gloom of the US economy.The US dollar rose against the Euro on Friday, with markets paying more attention to the stronger US manufacturing data than the weaker jobs report. Euro/ Dollar reached highs near 1.4980 after non farm payrolls before ending New York trade near 1.4800, and is around 1.4818 11.00GMT. Ahead tomorrow in the US, Non-manufacturing business activity index is released. The data is expected to slip further in January to 53.0 from a revised 53.9, reinforcing that US GDP growth will continue to slow in early 2008 and further weakening the greenback.
The Reserve Bank of Australia (RBA) meets tomorrow, where a further rate tightening is on the cards. Widening interest rate differential and USD weakness has seen the Aussie spike past 0.9000, where it reached highs of 0.9082 11.00GMT. This is great news for Australian importers, where the value of goods imports increased by 0.3% in December and expected to rise further in January.
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Derivative and forex trading broker Finotec is a division of leading real-time Internet trading company Finotec Trading Inc, which pioneered the world of online forex trading in 1998. After launching our revolutionary forex online trading platform in 2001, we continued to improve our services and no
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