The US dollar soared to fresh record highs against a number of its most-traded counterparts after data showing US employment accelerated at a faster than expected rate in February, adding to speculation the US Federal Reserve will no longer need to consider more monetary stimulus as the economy strengthens. In contrast, the yen tumbled to a 10½-month low against its US rival on concerns the Bank of Japan may crack under pressure from government officials and add to last month’s surprise currency-devaluing stimulus. The British pound and the euro also failed to keep pace with the broadly stronger dollar. Sterling suffered from weak local industrial output data, dropping to multi-week lows and still looks vulnerable ahead of upcoming UK unemployment reports. The euro meanwhile endured a similarly forgetful session as investors grow frustrated with Greece’s drawn-out debt fiasco. The currency-manipulating Swiss National Bank will keep traders on guard ahead of its quarterly monetary policy announcement.
Sterling
British economic data did little to support the pound which lost over one per cent of its value against a resurgent US dollar to end near seven-week lows. Sterling is set for another major test this week as investors eye Britain’s most up to date unemployment and claimant count figures. Another worrying set of reports are likely to keep sterling-traders troubled by speculation the Bank of England are still considering looser monetary policy.
US dollar
The dollar rallied across the board following another glowing US non-farm payrolls employment report. Payrolls increased by 227,000 in February, beating economists’ forecasts. February’s result means the US labour market has expanded by more than 200,000 people for the third consecutive month, offering fresh evidence of an economy gathering steam.
Euro
The euro is edging towards one-month lows versus the US dollar after its tumble which was triggered by a combination of renewed eurozone debt concerns and forecast-beating US economic data. Although Greece managed to secure enough support for its debt swap deal last week, markets are still concerned upcoming elections could bring in a new government in Athens that would seek to renegotiate its bailout terms.
Japanese yen
The yen’s record-breaking fall to near 11-month lows versus the US dollar, is still failing to appease Japanese officials, still demanding more action from the Bank of Japan to weaken the yen and boost the country’s exports.
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