Dollar Sinks Against The Euro
Mar 5th, 2009 | By Doug Casey | Category: Financial NewsIn the currency market, the dollar sunk against the euro. Late Wednesday, the euro was trading at $1.2651 vs. $1.2560 on Tuesday.
The dollar declined against most major currencies yesterday, losing ground as equity markets shifted to the black.
In economic news, it appears investors were encouraged by details of a government program designed to help as many as 9 million borrowers stay in their homes through refinanced mortgages or loans that are modified to lower monthly payments, as stocks broke a five-day losing streak.
“Virtually everyone was expecting some sort of a bounce, we just didn’t know exactly when that would occur,” said Randy Frederick, director of trading and derivatives at Charles Schwab. “You can’t go down forever.”
That’s a pretty stupid way to look at things in our view. Nothing has changed in the real world and this bounce is based not on fundamentals but lunacy.
Also reported on Wednesday (and not surprisingly) the U.S. labor market worsened in February, as private sector firms cut 697,000 jobs last month, according to the ADP employment index.
Another report from Challenger Gray & Christmas showed layoff plans rose 158% compared with a year earlier.
The reports come two days before the Labor Department reports its estimate for nonfarm payrolls. Economists are looking for the worst job loss in nearly 60 years.
This drop in the ADP index was the largest ever, dating back to 2001. Furthermore, January’s loss was revised sharply lower to 614,000 from 522,000 reported a month ago.
“The recession has spread aggressively to small-size businesses,” said Joel Prakken, chairman of Macroeconomics Advisers, the economic consulting firm that computes the ADP index from anonymous payroll data provided by ADP. Small businesses (those with less than 50 employees) cut 262,000 jobs in February.
FYI: Macroeconomic Advisers computes the index using anonymous payroll data collected by ADP. Automatic Data Processing Inc. (NASDAQ:ADP) provides payroll and human-resources services to about one in every six U.S. workers, serving more than 500,000 companies.
Source: Dollar Sinks Against The Euro
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