Dollar Bulls Ignore Horrid Jobs Data
Dec 8th, 2008 | By Doug Casey | Category: Financial NewsIn the currency market, the dollar advanced against the euro. Late Friday, the euro was trading at $1.2696 vs. $1.2801 on Thursday.
Traders cavalierly ignored disastrous employment data, as the Labor Department reported that U.S. nonfarm payrolls plunged by 533,000 in November, the worst job loss in 34 years. Economists expectations were for a loss of only around 350,000.
In addition, the unemployment rate rose from 6.5% in October to 6.7% in November, the highest jobless rate since October 1993, near the end of the last recession.
Only in this topsy-turvy world could that be taken as a positive. “What’s happened recently is that weak U.S. data — and this is certainly weak — have raised concerns about the U.S. and global economy and that’s actually benefited the U.S. dollar,” said Meg Browne, currency strategist at Brown Brothers Harriman.
“With jobs so weak, it’s a negative outlook and it means that the deleveraging process could continue,” Browne said. “What’s the safe haven currency — it’s the U.S. dollar.”
The euro was also hurt as Germany’s economics ministry reported an unexpectedly large drop in October manufacturing orders, to a seasonally adjusted 6.1% monthly fall. Economists had been looking for a modest rise of 0.4%, after a downwardly revised September plunge of 8.3%.
“These are truly terrifying numbers. We have never seen anything as dramatic in German orders,” said strategists at Danske Bank. “[It] points not only to a rapidly deepening recession in Europe’s biggest economy, but also to a serious slump in the other Euroland countries.”
Source: Dollar Bulls Ignore Horrid Jobs Data
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