The theme of dollar weakness quickly returned to the market as the US currency reversed virtually all of the strong gains enjoyed in the wake of robust US jobs data this afternoon.
The figures showed the US economy created 110,000 jobs in September, in line with expectations. The real surprise, however, came in the extremely sharp upward revision to August’s data from a fall of 4,000 to a rise of 89,000.
Immediately after the release, the euro dropped to a two-week low of 1.4030 against the dollar, while the pound hit a low of 2.03 usd, but both have since recouped all of those losses and are now trading higher than they were just before the release.
Bear Stearns currency analyst Steve Barrow said the currency response simply reflects the lack of demand for dollars in the market at the moment.
“The payroll numbers this month were as unambiguously good as they were unambiguously bad last month, but the data is not really all that important any more,” he said.
Peter Stoneham at Thomson IFR Markets noted that the euro’s fall below the 1.4050 usd mark simply attracted buyers, with traders citing interest out of Europe, the Middle East and eastern Europe.
[via-Fxstreet]
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