The US dollar fell today against most major currencies as the worse-than-expected payrolls fueled the speculation that the Federal Reserve will stimulate the US economy, weakening the currency at the same time.
US non-farm payrolls showed an increase by 120,000 jobs, compared to the median estimate of 207,000. The data hurt outlook for the US economy and supported the opinion of those people (Fed Chairman Ben Bernanke among them) who believe that the economy is still too fragile to survive without stimulus.
The report wasn’t completely negative for the dollar, though. As Boris Schlossberg, the director of research at the online currency trader GFT Forex, explained:
The market is torn between two dominant themes: risk aversion, which is dollar positive, and the fear that last Fridayâs payrolls numbers could bring back quantitative easing, which is dollar negative.
The reaction to the payrolls may be delayed as US markets were closed for Good Friday, while markets in Europe and some other parts of the world are closed today. On the other hand, thin volumes may result in exaggerated market moves.
EUR/USD traded flat at 1.3102 as of 21:41 GMT today, following the drop from 1.3101 to 1.3033, the lowest level since March 15. GBP/USD was at about 1.5892 after it fell from 1.5886 to 1.5835. Meanwhile, USD/JPY rebounded to 81.54, erasing the fall from 81.51 to 81.18.
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