Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

CORRECTED - CORRECTED-CORRECTED-FOREX-Euro at 3-wk high as dollar nurses los

ForexJan 11, 2010 01:27AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

(Corrects to make clear the biggest fall in the U.S. dollar in six weeks was on Friday not Monday. A previous FOREX report with USN [nSGE60A03L] issued at 0347 GMT also carried the same error)

* Dollar down post U.S. jobs report, China export data

* Stop-losses triggered in thin market, euro above $1.45

* Fed's Bullard says rates to stay low, job losses to slow

* Aussie rallies on Chinese and local data, gold

By Anirban Nag and Vidya Ranganathan

SYDNEY/SINGAPORE, Jan 11 (Reuters) - The U.S. dollar dropped afresh on Monday, after suffering its biggest fall in six weeks in the wake of disappointing U.S. jobs data, while the Australian dollar soared on the back of strong export numbers from China.

The euro charged as high as $1.4533, from $1.4414 late in New York on Friday, with stop losses triggered around $1.4480.

It pierced the $1.4500 barrier after St. Louis Federal Reserve President James Bullard said U.S. interest rates may remain low for some time [ID:nN10135532].

The next big resistance is now seen around $1.4570 and a break of that would suggest a gradual recovery towards $1.4800, traders say.

"Expectations that the Federal Reserve will keep rates on hold for the foreseeable future, encouraged by Friday's weak employment report have held the dollar down," said Joseph Capurso, a strategist at Commonwealth Bank.

The dollar index <.DXY> was down 0.69 percent at 76.93, having risen to as high as 78.187 on Friday.

Latest data from the Commodity Futures Trading Commission showed speculators cut U.S. dollar long positions in the week to Jan 5, and traders say hat trend is likely to pick up. [IMM/FX].

Trading was thin with Tokyo shut for a holiday, encouraging some players to trigger stop-loss selling of the U.S. currency.

Traders expect the greenback to stay on the defensive as speculators cut long positions in the U.S. dollar following the U.S. jobs report.

Data on Friday showed U.S. employers cut 85,000 jobs last month. November payrolls, however, were revised to show the economy actually added 4,000 jobs. [ID:nN0747110].

Interest rate futures <0#FF:> pared expectations the Fed will raise benchmark short-term rates any time soon. July futures contract implied a 22 percent chance of a rate hike by mid-2010, down from around 40 percent before the jobs data.

"The dollar's reaction soon after the soft employment data would suggest that traditional economic relationships i.e. soft data, weaker currency and vice versa, are starting to become a dominant theme again at the cost of last year's risk on/risk off theme," RBC Capital Markets said in a note to clients.

"This could partially explain the whippy trading on Friday.

"Over the medium-term, however, the risk on/risk off theme is expected to continue to fade with FX focus returning more to economic releases and the implication for monetary policy rather than blindly following global risk sentiment."


The U.S. dollar's next litmus test is expected to be the U.S. earnings season which kicks off in earnest this week, U.S. retail sales, industrial production and inflation data. [ID:nN10128337]

"The new year is beginning with a gradual unwind of December's dollar rally, as the notion of early Fed tightening is put to rest," JPMorgan said in a report. "Ahead of earnings season, add to U.S. dollar shorts versus commodity currencies and also buy yen crosses."

Still, traders suspected the euro will have difficulty rising past the $1.4570 resistance, given the jobs situation in the euro zone is no better than in the United States -- it was at an 11-year high in November.

The European Central Bank will meet on Thursday and is expected to keep rates unchanged.

Jitters about more sovereign debt downgrades could keep a leash on the euro. The Financial Times reported on Monday that Portugal has been warned about a threat to its ratings. [ID:nLDE6090O4].

That is likely to compound worries already caused by Greece's credit battle and Iceland's row with the Netherlands and Britain over its banking collapse.

The Australian dollar rallied to a 26-month high versus the euro , rising to as high as 0.6442 euros. The Aussie also struck a new five-week high of $0.9318 buoyed by strong Chinese export numbers [ID:nTOE60900L].

The Aussie was also bolstered by a rise in gold prices. Spot gold rose to a five-week high early on Monday.

Against the yen, the Aussie hit a 15-month high above 86 yen , with sell orders at around 86.10 yen levels, traders said.

The yen was, however, firmer on the dollar, rising to 92.15, from 92.68 yen late in New York on Friday.

On Friday, the yen recovered some ground after Japan's new finance minister backed off from his earlier call for a weaker yen following a rebuke from the prime minister. (Editing by Jan Dahinten)

CORRECTED - CORRECTED-CORRECTED-FOREX-Euro at 3-wk high as dollar nurses los

Related Articles

Dollar Edges Lower; April Payrolls Data in Focus
Dollar Edges Lower; April Payrolls Data in Focus By - May 07, 2021

By Peter Nurse - The dollar edged lower in early European trade Friday, under modest pressure ahead of the monthly U.S. employment report which is expected to firm up...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email