Dollar Marginally Higher Ahead of U.S. Jobs Report

August 6, 2010

The dollar firmed 0.3% against the Swiss franc and posted 0.2% gains against sterling, the yen, the Canadian dollar and the euro.  It also edged 0.1% higher versus the yuan and the kiwi.  Only the Aussie dollar held steady against the greenback as dealers await U.S. July labor figures at 12:30 GMT.  A 60-65K drop in jobs is anticipated from the crowd.

Equities remain upwardly biased for the most part, gaining 1.6% in China, 0.6% in Hong Kong, 0.5% in Indonesia, and 0.3% in Taiwan.  Japan’s Nikkei eased 0.1%, and the Australian and South Korean markets closed unchanged.  The British Ftse, Paris Cac and German Dax have traded up 0.5%, 0.3%, and 0.2%.

Ten-year sovereign bond yields rose two basis points in Japan and Britain and by one basis point in Germany. 

Oil and gold prices dipped 0.4% and 0.3% to $81.71 per barrel and $1195.70 per troy ounce.

Several European countries released industrial production data that fell short of expectations.

  • British output fell 0.5% in June versus a forecast gain of 0.2% but was 1.0% greater in the second quarter than in 1Q10.  Industrial production recorded on-year growth of 1.3% in June and 1.6% in 2Q.  Factory output in 2Q rose 1.6% on quarter and 3.8% on year.
  • German industrial production fell 0.6% in June but was still 10.9% greater than a year earlier.  Analysts had expected a rise of about 1% on month.  Production nonetheless still jumped 5.4% last quarter (23.3% at an annualized rate).  Manufacturing dropped 0.9% in June.
  • Italian industrial production rose 0.6% in June, a tenth less than anticipated, and was 8.1% greater than in mid-2009.  Italy also reported second-quarter real GDP growth of 0.4% versus 1Q and 1.1% against the second quarter of 2009.
  • Czech industrial production decelerated to a lower-than-forecast on-year advance of 9.7% in June from 16.7%, most since early 2001, in May.  Construction fell 4.7% in the year to June.
  • Norwegian industrial output dropped 1.7% in June and by 4.4% from mid-2009 despite gains of 3.3% on month and 7.2% on year in manufacturing.
  • Dutch industrial production fell 1.2% in June but rose 7.2% on year.  Industrial sales recorded on-year growth of 18.8%.

British producer output prices edged up 0.1% in July and were 5.0% greater than a year earlier.  The core PPI-O index firmed 0.2% on month and 4.7% on year.  Producer input prices fell 1.0%, twice as much as forecast, but still managed to be 10.8% greater than a year earlier.  Britain has been coping with higher inflation all year than other advanced economies.

Swiss unemployment dipped unexpectedly to 3.8% in July from 3.9% in June.

France’s trade deficit narrowed 27% in June to EUR 3.8 billion.  The drop was twice as much as projected.  The June budget deficit of EUR 61.7 billion was 25% less than a year earlier.

Greek CPI inflation of 5.5% in July was near expectations.

The Conference Board Japanese index of leading economic indicators fell sharply in June to 100.3 from 102.1 in May, 102.8 in April and 102.9 in March.  The index of coincident indicators held steady at 98.4 after dipping three-tenths in May.

Peru’s central bank late yesterday surprised analysts with a steeper 50-basis point increase of its key interest rate.

Canadian labor statistics were a bit weaker than anticipated in July after a couple of very strong months.  The jobless rate firmed to 8.0% from 7.9% in June but was less than 8.1% posted in April and May or the peak of 8.7% in August 2009.  Jobs fell by 9.3K, as a 139K plunge in full-time workers was mitigated by a 129.7K advance in part-time help.  On the whole, Canada’s labor market has performed much better than the U.S. market.  Employment was 2.3% greater than in July 2009.

Russia imposed curbs on wheat exports in response to continuing wildfire damage.

Canada will also be reported the IVEY-PMI index today, but most attention is on the U.S. Labor Department’s monthly jobs report due at 12:30 GMT.  U.S. consumer credit figures are due as well.

Copyright Larry Greenberg 2010.  All rights reserved.  No secondary distribution without express permission.

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