Dollar Softens; Euro Continues Recovery
The U.S. dollar rally continued to soften Friday as the market awaits the November jobs report. The market expects a 150,000 increase in nonfarm payrolls with a 158,000 increase in private payrolls.
With the positive upside surprises in the ADP and the employment components of the ISM reports, we feel this morning's report poses some upside surprise risk which most likely would bolster risk appetite.
The euro continues to recover amid further talk of European Central Bank bond buying, which saw further narrowing in eurozone peripheral spreads. The euro cleared the $1.3250 hurdle with additional support from another good economic data release -- retail sales -- and is set to test the Monday high of $1.3300.
Meanwhile, sterling rallied on the back of the rising risk appetite, along with a run of improvement in U.K. economic data releases, with a run up to $1.5683 subsequent the PMI release.The yen was mostly quiet in the Asian session as most market participants were sidelined ahead of the U.S. jobs report this morning. As such, a report in line in consensus may stoke a rise in U.S. bond yields, increasing the yield advantage over the yen, thus strengthening the dollar. Elsewhere, the net change in Canada's employment was below consensus and despite the drop in the unemployment rate -- driven by a drop in labor participation as opposed to job creation -- weakened the Canadian dollar. The loonie fell back to $1.003 following the print. European sovereign bond yields continued to decline with Ireland and Portugal leading the way with a large drop in the 10-year yields as anecdotal evidence suggests that the ECB continues to purchase periphery debt. Ireland's 10-year yield, for instance, is down 31 basis points with Portugal's yield down 23 basis points. Likewise, Spain's 10-year yields are down 12 basis points followed by a 4 basis points decrease in Italy's yields.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV