The U.S. Dollar is under pressure at the midsession following a strong surge in U.S. equity markets.
The U.S. Dollar is under pressure at the midsession following a strong surge in U.S. equity markets. Stocks are being boosted by perceptions that today’s U.S. Non-Farm Payrolls report may be signaling the end to the recession.
The U.S. Unemployment Rate rose more than expected to 9.7%, up from 9.4% in July. The August Non-Farm Payrolls Reports showed a loss of 216,000 versus guesses of 225,000. July was revised to show an even greater loss of jobs.
The Dollar rallied immediately following the release of the employment number as traders interpreted the report as a sign the economy was weakening. Traders took action by seeking safety in the U.S. Dollar.
The Dollar began to erase its gains after the U.S. equity markets opened as the interpretation of the report changed once the internal numbers in the report were crunched. Analysts seemed to put more weight on the fact that the total jobs lost were less than the estimate and more in line with the number of jobs lost prior to September 2008.
The equity market rally has renewed trader appetite for risk while driving up higher yielding currencies such as the Euro, Aussie, Kiwi and Loonie.
The EUR USD regained a key retracement zone and is now on the bullish side of its August range. Higher yielding currencies such as the AUD USD and NZD USD continued their up trend after several days of sideways action. The big gainer is the Canadian Dollar which was threatening to turn its trend down for several weeks, but now appears to be on track to at least remain range bound until Canadian economic reports begin to hit the market.