U.S. Labor Data – Better than Expected
The U.S. Labor Department data released on Thursday, April 24, 2008 showed that unemployment benefit claims for last week dropped by 33,000 to 342,000, better than the increase of 3,000 which was expected by most economists. This data, coupled with expectations that the U.S. Federal Reserve may soon be ending their rate cutting cycle, helped the U.S. Dollar to hover around close ranges against major currencies on Friday morning in trading in Tokyo.
According to most analysts, recent stable movements in the financial markets, reduced concerns about the liquidity crisis and the increasing commodity prices may indicate that the Federal Reserve will soon end the cycle of rate-cutting soon.
On Friday morning, April 24, 2008 at 09:30 am (00:30 GMT) the U.S. Dollar traded at 104.32 Yen, as compared to 104.20-104.30 Yen traded late in New York on Thursday.
The business sentiment index for March for Germany declined from 104.8 to 102.4, which is worse than the 104.2 predicted by most analysts. This data shows that the economy of the Euro zone is still closely tied to the U.S. economy and the Euro zone will continue to experience a liquidity crisis. Consequently, the ECB may continue to show reluctance to increasing interest rates.