Daily Economic Roundup for July 3, 2009

United States

Surprise, surprise! The dollar rallied late during the US session on increased risk aversion as the Non-Farm Payroll Employment report’s results were worse than expected. The report showed that 467,000 jobs were lost in June, much higher than the forecasted figure of 322,000. This came one day after a similar report by the ADP also had worse than expected results. This was discouraging news, as job losses fell to a revised 322,000 in May. Prior to that, monthly releases had shown job losses figures above 500,000. The unemployment rate now stands at 9.5% and is expected to hit 10% by the end of the year. More on the United States…

Euro-zone

The EUR dropped like a bomb yesterday when the European Central Bank decided to sit in on its hands this time. Apparently, the ECB President Jean-Claude Trichet thinks that interest rates in the 16-country zone should remain status quo. He said that the bank has already done its fair share in easing tight credit conditions. The central bank has already lowered interest rates an all-time historical low of 1% and committed to purchase bonds worth 60 billion EUR. It is now the local banks’ turn to pass on liquidity to the economy. More on the Euro-zone…

United Kingdom

Last night’s USD sell-off didn’t do much to buoy the GBP as it still found itself at the short side of the pair to close the day. The GBP tripped and slid pretty much across the board during the Euro session. If there’s any consolation, it saw itself mixed against the other major currency players when the US trading session’s clock ticked to zero. More on the United Kingdom…

Japan

Yesterday was a huge day for the JPY as it bullied all of the other so-called currency big boys to submission. The JPY managed to take out most or all of its losses for the past 5 days. A bearish engulfing candle (the most recent long candle (red) that towers over the green ones) is now noticeable in the daily charts of the samurai pairs. More on Japan…

Australia

The Land Down Under reported a weaker trade balance as the deficit doubled from 0.28 billion AUD to 0.56 billion AUD. Economists had expected the trade deficit to narrow to 0.10 billion AUD. With exports declining by 5%, the trade balance is now at its yearly low. As a result, the AUD/USD also went, errr, down under. More on Australia…

New Zealand

The NZD took a solid beating from the USD once again yesterday as it fell almost 150 pips from its Asian open price. Support at 0.6400, a key technical and psychological support level failed to hold as sellers took the pair all the way back down, just a few pips shy last week’s low. Risk aversion, as usual, was the culprit! More on New Zealand…

Canada

The USD/CAD traded above 1.1600 after the weaker-than-expected NFP report brought risk aversion back to the markets. Because of renewed USD strength, gold prices have dropped to $66.67 per ounce, signaling that further weakness may be in the cards for commodity currencies. More on Canada…

Switzerland

The USDCHF pair inched up slowly yesterday, pairing off the gains the CHF made against the USD the day before. This was probably due to a combination of reports that came out from the US, as well as comments made by SNB Board member Thomas Jordan. More on Switzerland…