Dollar Rebounds After Weak U.S. Jobs Data
04 Dicembre 2020 - 10:44AM
RTTF2
The U.S. dollar recovered against its major counterparts in the
European session on Friday, as a sharp slowdown in U.S. job growth
for November lifted the appeal of the safe-haven currency.
Data from the Labor Department showed that the non-farm payroll
employment rose by 245,000 jobs in November after jumping by a
downwardly revised 610,000 jobs in October.
Economists had expected employment to increase by 469,000 jobs
compared to the addition of 638,000 jobs originally reported for
the previous month.
Despite the weaker than expected job growth, the unemployment
rate dipped to 6.7 percent in November from 6.9 percent in October.
The unemployment rate was expected to edge down to 6.8 percent.
Data from the Commerce Department showed that the U.S. trade
deficit widened in the month of October.
The report said the trade deficit widened to $63.1 billion in
October from a revised $62.1 billion in September. Economists had
expected the deficit to widen to $64.8 billion from the $63.9
billion originally reported for the previous month.
The wider deficit came as the value of imports increased by $5.0
billion or 2.1 percent to $245.1 billion, while the value of
exports climbed by $4.0 billion or 2.2 percent to $182.0
billion.
Risk sentiment improved on optimism over a swift economic
recovery from the coronavirus pandemic.
House Speaker Nancy Pelosi and Senate Majority Leader Mitch
McConnell held discussions on a coronavirus stimulus deal as
Congress races to reach an accord and avoid a government
shutdown.
McConnell said there were "hopeful signs" for striking a
stimulus deal before the end of the year, but he did not elaborate
in detail.
The currency showed mixed performance against its major
counterparts in the Asian session. While it rose against the yen,
it dropped against the pound and the euro. Against the franc, it
held steady.
The greenback edged up to 104.11 against the yen, after having
dropped to 103.74 at 7:30 pm ET. The pair was worth 103.83 when it
ended deals on Thursday. Should the greenback continues its rise,
108.00 is possibly seen as its next resistance level.
The greenback bounced off to 0.8917 against the franc, after
falling as low as 0.8886, which was its weakest level since January
2015. At Thursday's close, the pair was valued at 0.8903. The
greenback is seen finding resistance around the 0.92 level.
The greenback advanced to 1.2132 against the euro, from a
2-1/2-year low of 1.2178 touched at 5:45 am ET. The pair had closed
Thursday's deals at 1.2139. On the upside, 1.18 is possibly seen as
its next resistance level.
Data from Destatis showed that German factory orders grew at a
faster pace in October.
Factory orders grew 2.9 percent on month in October, faster than
September's 1.1 percent rise. Orders were forecast to climb 1.5
percent.
In contrast, the greenback declined to 1.3539 against the pound,
a level unseen since May 2018. The pound-greenback pair had
finished yesterday's trading session at 1.3441. The greenback is
poised to find support around the 1.42 level.
Survey data from IHS Markit showed that the UK construction
sector continued to expand in November as new orders grew the most
since late 2014.
The IHS Markit/Chartered Institute of Procurement & Supply
construction Purchasing Managers' Index rose unexpectedly to 54.7
in November from 53.1 in October.
U.S. factory orders for October are set for release at 10:00 am
ET.
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