On Friday, the Labor Department said the U.S. economy added 113,000 jobs in January, well below expectations for 185,000 new jobs, as inclement weather contributed to the slowdown in hiring. The report also showed visit this site that the number of people participating in the labor force edged up to 63% from a 30-year low of 62.8% last month, while the unemployment rate unexpectedly ticked down to a five year low 6.6% from 6.7% in December. The report was seen as unlikely to prompt the Fed to halt reductions in its stimulus program. The bank announced a second cut to its asset purchase program in January, trimming it to $65 billion-per-month. In Japan, government data earlier showed that the current account deficit expanded to JPY0.20 trillion in December, from JPY0.05 trillion the previous month.
EUR/USD hit 1.3651 during European afternoon trade, the pair”s highest since January 30; the pair subsequently consolidated at 1.3636, inching up 0.01%. The pair was likely to find support at 1.3583, the low of January 16 and resistance at 1.3688, the high of January 28. The dollar remained under pressure after the Labor Department on Friday said the U.S. economy added 113,000 jobs in January, well below expectations for 185,000 new jobs, as inclement weather contributed to the slowdown in hiring.
Forex Traders Plot Next Moves Before Yellen Testimony
Traders said expectations that Asian stocks could track Wall Street were keeping a lid on demand for the low-yielding Japanese currency for now. The dollar bought 102.65 yen, while the euro fetched 139.79 yen, both at their highest since late January. Against the greenback, the euro traded at $1.3623, not far from a one-week high of $1.3649 reached on Friday. Last week was a frustrating one for the market with two major events: the European Central Bank policy review and U.S. payrolls data both providing no new leads.
Or will it simply lower the unemployment rate? Whatever the outcome, fixed-income dealers will probably be pricing out the possibility of a rate hike this year the BoE remains the favorite to be the first developed country to hike its rates. Depending on what transpires this week, U.K. gilts are preferred to rally, while sterling is expected to underperform.