Dollar Rises

Source: http://feedproxy.google.com/~r/ContrarianProfits/~3/AGkAX0bhK5g/18693
Posted on Friday, July 3rd, 2009 | In Market Commentary

Contributed by: Doug Casey (http://www.contrarianprofits.com) -

In the currency market, the dollar climbed higher against the euro. Late Thursday, the euro was trading at $1.4027 vs. $1.4156 on Wednesday.
The day’s data was about as bad as it could be. Primary was the Labor Department’s report on nonfarm payrolls, which showed the loss of 467,000 jobs in June. That was in line with ADP figures from Wednesday, and far above the 325,000 contraction predicted by economists.

The unemployment rate edged up to 9.5% from 9.4% in May, not quite as bad as the 9.6% expected. All told, the data “strongly suggest that consensus forecast for a second half recovery is overly optimistic,” said Steve Ricchiuto, chief economist at Mizuho Securities in New York.

Some analysts tried to pretty things up by pointing out that the job loss trend is improving, but Millan L. B. Mulraine, of TD Securities in Toronto, wasn’t having any. “On the whole, this was a very ugly labor market report, and there is no amount of lipstick that can improve its image,” Mulraine said.

Across the pond, the ECB left unchanged its key lending rate, as expected, and stuck with the amount of covered bond purchases in its plan. At the same time, the statistics agency Eurostat reported that the unemployment rate in the 16-nation zone matched the US, rising more than expected to a 10-year high of 9.5% in May from 9.3% in April.

And Marketwatch.com reported that, “China hopes for diversification of the international currency system in the future, and this topic could be addressed at the Group of Eight leaders’ summit next week in Italy, Chinese Vice Foreign Minister He Yafei said …

“The international financial crisis has fully exposed weaknesses in the international currency system, He reportedly said, and China hopes that the system can diversify.”

Source: Dollar Rises