Early Nonfarm Payrolls Help Dollar Despite Bad Data

EUR/USD fell sharply today paring the weekly gain as the employment statistics in U.S. was released. Not only employment figures disappointed market participants, but also ISM services index declined faster than expected in June. But for some strange reason that supported the U.S. dollar and it showed the fastest daily gain since April 24. EUR/USD declined from 1.5890 to 1.5695.

Nonfarm payrolls lost 62k in June, that loss followed the same decline in May (revised up from 49k loss) and was worse than 60k of the forecast. Unemployment rate remained at 5.5%, while it was expected to fall to 5.4%.

ISM services index lost 3.5% in June and is now at 48.2%. It was expected to go down to 51.0% only. The current decline in this index followed decline in May, which indicates a real stagnation in the non-manufacturing sector.

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Dollar Deeps Further on Uneployment Rapid Growth

The U. S. dollar dropped down today against as the unemployment rate soared in the U. S. Yesterday EUR/USD gained from the hawkish statement by Jean-Claude Trichet (he said that he will probably raise the interest rates on ECB’s next meeting), today it grows because of the poor U.S. fundamentals.

Nonfarm payrolls decreased by 49,000 in May — below the expected 60,000 dropdown, but above the revised April 28,000 loss in the jobs. Unemployment rate soared up from 5.0% a month ago to 5.5% in May; the market analysts predicted only a slight growth from 5.0% to 5.1%.

Wholesale inventories report for April showed a better dynamics — they rose 1.3% after 0.1% gain in March (revised up from -0.1%) and 0.4% growth estimate for April.

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