Dollar Declines Against Euro
May 7th, 2009 | By Doug Casey | Category: US Dollar & Forex TradingIn the currency market, the dollar sank against the euro. Late Wednesday, the euro was trading at $1.3341 vs. $1.3319 on Tuesday.
The influential data of the day was ADP’s jobs number, which showed that U.S. private-sector employment fell by 491,000 in April. While hardly good news, that was the smallest decline since October.
The number beat expectations and raised hopes that economists’ gloomy predictions for the Labor Department’s jobs report, due out on Friday, may not be fulfilled. Consensus projection is for a decline of 580,000.
“By any measure except the past few months, a 491,000 drop in private payrolls is disastrous, but at least it is less disastrous than before,” said Ian Shepherdson, chief U.S. economist for High Frequency Economics.
Gains by the euro were capped, though, after Standard & Poor’s cut its ratings for five out of six rated German Landesbanks, financial institutions owned by regional government and local community savings banks.
The downgrade “contributed to risk aversion and pushed up the dollar,” said Michael Woolfolk, senior currency strategist at the Bank of New York Mellon (NYSE:BK).
Source: Dollar Declines Against Euro
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