Dollar Sinks Against Euro
Jan 8th, 2009 | By Doug Casey | Category: Financial NewsIn the currency market, the dollar slipped against the euro. Late Wednesday, the euro was trading at $1.3618 vs. $1.3529 on Tuesday.
The buck was undermined by the day’s horrendous job number. The ADP Employment Services report, generally seen as a leading indicator for the official Labor Department data due on Friday, said yesterday that private companies cut 693,000 jobs in December, far more than the 500,000 economists were projecting.
The report paints “a shockingly weak picture of the labor market,” said economists at RDQ Economics. The labor market is on track for the largest quarterly decline since 1945, they added.
In addition, for all of 2008, companies announced a total of 1.2 million job reductions, the most since 2003 and 59% more than in 2007, according to outplacement firm Challenger Gray & Christmas.
Analysts now await with trepidation the Friday nonfarm payrolls report, with many predicting a jump in unemployment from 6.7 all the way to 7.1%.
“The ADP figures confirmed the dollar bears’ worst nightmare, nearly hitting the minus-700K barrier, suggesting that the U.S. labor situation has deteriorated significantly over the past month,” wrote Boris Schlossberg, director of currency research at GFT.
However, Schlossberg argued, “given the negative sentiment already prevailing in the currency market any reading close to minus-500K could be seen as dollar-positive, and the greenback could actually gain as a result.”
Source: Dollar Sinks Against Euro
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