The US Dollar suffered in overnight trading as the troubling employment market in the US continues to weigh heavily on the Fed as the latest jobless claims reports announced yesterday indicate that the labor market in the US could worsen before it improves.
The continuing Jobless Claims figures released yesterday which measure the number of unemployed individuals who qualify for benefits under unemployment insurance increased to 3272k, up from 3304k and higher than the estimated reading of 3300k. There was the smallest possible chink of light in the labor market with a slight decline in initial jobless claims figures released yesterday with the number falling to 382k, down from 385k, although this was significantly less than the 375K mooted by analysts.
To add further fuel to the fire it was announced today in the press that the Bank of America plans to cut 16,000 jobs by the end of the year and American Airlines also sent out a letter to 11,000 of its employees warning them that their jobs could be at stake as the company goes through bankruptcy restructuring.
The result of the poor data and news on the labor market in the US which has seen an unemployment rate above 8% for some while was a selling off of the USD in Asian Markets, with the USD down against all major currencies. The greenback was down 0.11% against the Euro, down 0.21% against the GBP, down 0.10% against the JPY, down 0.14% against the CHF, down 0.27% against the AUS and down 0.19% against the CAD. The US Dollar index which measures the USD against a basket of 6 weighted currencies was down 0.15%, valued at 79.38.
The weakened USD meant that there were rises in the commodity markets as the price of Gold, Silver and Oil became cheaper. Gold was up 0.26%, trading at 1772.45. Silver posted a gain of 0.57%, trading at 34.878, whilst the price of a barrel of Crude Oil rose 0.75%, trading at 93.13. Oil had earlier traded at a session high 93.22 a barrel with support expected at the 90.97 levels and resistance likely to be encountered at the 99.78 level.
In what is a quiet day on the economic calendar, the UK is expected to announce an increased deficit in its public sector net borrowing whilst the Canadian Dollar will take centre stage when it releases its CPI and Core CPI figures later on in the afternoon.