The U.S. Dollar firmed during Thursday’s Asian trading session after investors finally shrugged off last week’s labor report disappointment and had their faith renewed in the recovery of the U.S. economy. Many investors are now beginning to view Friday’s non-farms payroll numbers as simply a one-off and have reconsidered that their earlier assessment of an improving economic situation in the U.S. still is a valid one. That was supported by stronger than expected PPI data released yesterday which suggested that there are no price pressures yet that might influence the Fed’s thinking; on Tuesday, retail sales saw a positive increase.
As reported at 11:48 a.m. (JST) in Tokyo, the USD/JPY got a strong bounce to 104.74 Yen, moving closer to the 5-year high of 105.45 Yen struck earlier this year, though currency strategists say that the dollar’s gains might be capped in the short term. The EUR/USD traded at $1.3605, recovering slightly from an overnight weekly trough of $1.3581.
Disappointment Down Under for Jobs Data
In Australia, disappointing employment data has increased speculation that the Reserve Bank of Australia might soon move to lower interest rates. More full time positions were shed in December than had been expected by consensus estimate, with the pace of those closures at a 9-month high. As a result, the AUD/USD pair dipped to $0.8797, a loss of more than 1% and a low not seen in nearly 3½ years.