US Unemployment Declines to 10%

According to the US Bureau of Labor Statistics, the US jobless rate dropped to 10 percent level in November from 10.2 percent in October. These figures show that the US job market is getting out recession, however, significant obstacles remain. In November employers fired 11,000 workers, far below prior expectations of 150,000, Bureau of Labor`s figures show. The strong improvement surprised analysts, mentioning that the US job market still remains weak, however, moves into right direction.

The highest degree of employed people was seen in business and professional services adding 86.000 jobs. Employment in healthcare and education showed signs of recovery, while construction and manufacturing industry delivered 27.000 and 41.000 monthly job losses correspondently. However, there are still over 15 mln people unemployed in the USA, this number is twice bigger than before the recession started in 2007.

President Barack Obama called this data “good news” and promised to continue carrying out his programs aiming at hiring people.

After the official report the US Dollar spectacularly appreciated versus other Forex currencies.

Economists Predict Us Jobless Rate to Hit 13% Level

The unemployment rate may shortly rise to 13 percent level, the highest level since World War II, David Rosenberg, an economist at Gluskin Sheff & Associates Inc.

This prediction was made after the US Department of Labor released negative unemployment figures showing that the US jobless rate, one of the most important economic indicators, unexpectedly hit the level of 10.2 percent. David Rosenberg gave an interview to Bloomberg news agency. In this interview he said that “this is going to be the mother of all jobless recoveries.” He also noted: “At the beginning of the year, who was calling for unemployment to go up to 10 percent?”

In the near future joblessness rate has all the prerequisites to reach the 13 percent level. The rate of 13 percent would be the highest since monthly records started in January 1948. Previously postwar maximum was 10.8 percent in 1982. During the Great Depression in 1933 unemployment jumped nearly to 25 percent.

Besides, the under-employment rate, including part-time workers who would prefer a full-time post, and people who would like to work and have given up looking, hit 17.5 percent last month, the maximum reading since records started in 1994.

Bearishness as Future for Dollar

The advance of the USD continues. The EUR/USD pair is now traded 1.4620. And the GBP/USD is close to 1.5900 level durinf European forex trading hours. The JPY is the only currency to gain versus the greenback after reaching its 8-month low of 88.22. The pair is now traded near 90.00 mark as the latest Forex quotes show. Announcements made by Minister Fujii have producedinfluence on many traders wondering if Japan will not intervene in its currency's recent rise. If it chooses not to do that, the target for the USD/JPY may be close to 82.00 very soon.

Looking ahead to today`s events, however, the most important one will be the Conference Board's release of their Consumer Confidence announcement at 14:00 GMT. As the trend is currently pointing towards rising optimism in the US, bearishness for the USD may still be seen today.

No Positive Future for Dollar

Going short on the US currency brought lots of profits for traders last week. The USD continued its fall versus the EUR and other major Forex currencies. This fall accounted for 300 pips versus EUR, 400 pips versus the GBP and 350 pips versus the Japanese currency.

Another fall for the greenback was reasoned by negative US data. The gap between import and export increased by 16 percent or $32 billion, the largest difference since 1999. The U.S Consumer Credit fell by 21.6$ billion in July. Unemployment rate is constantly getting to 10 percent rate. It looks like until the employment condition will take a turn for the better, the Dollar might continue to weaken.At the beginning of the previous week market analysis showed a modest decline, but the final result appeared to be well below all expectations.

This week is full of important business events including the Consumer Price Indices, the Retails Sales Indices, the Producer Price Induces, the Long-Term Purchases, the Building Permits and the weekly Unemployment Claims.

US Trades after Labor Day

As the US market was closed yesterday, the US Dollar slid versus other Forex currencies. The Labor Day holiday in the USA and Canada took its toll on the American currency. It came close to its 2-week low versus the GBP after the statement of Kraft Foods to buy British chocolate maker Cadbury. In spite of low trading risk appetite remained high on Monday. The Dollar Index, which measures the value of the Dollar versus its six main counterparts, dropped by 0.2% to 78.00 yesterday.The USD/JPY cross weightened by 25 pips yesterday to the 92.85 level.

On Monday the Australian Dollar performed a significant rise hitting a 1 year high vs. the U.S. Dollar. The AUD was received unexpected support from rising Gold and Crude Oil prices as of late, which Australia's currency is highly dependent. In addition, Australia's currency is in much greater shape than that of America. The CAD made became closer to the greenback. By the end of yesterday's trading, the EUR/USD pair finished trades at 1.4332.

Pending Home Sales Spur USD Rise

Yesterday the US currency continued its bullish trend as optimistic U.S manufacturing data and Pending Home Sales figures were released. The U.S. manufacturers expanded in August for the first time in one year and a half, while home sales contract hit a two-year maximum in July, helping helped the economy to recover and thus spurred the demand for the USD. Factories and constructors, which have accounted for half of all the jobs lost since the recession started, may be rising in coming months as home sales are. The U.S dollar jumped against most of its major currency pairs yesterday as sharp losses in global stock markets offset lower than expected U.S. manufacturing data and boosted the greenback's demand. As a result, the USD finished yesterday trading session 150 pips higher against the EUR at the1.4216 level. As market analysis shows the US currency also saw bullishness against the GBP and closed at 1.6155.

The American Petroleum Institute informed yesterday that crude supplies declined 3.19 million barrels last week. A U.S. government report may also show stockpiles reduced. Oil’s gains were supported as Australia said economic growth unexpectedly accelerated in Q2, adding to expansion in Europe`s leading economies such as France and Germany.

US GDP Data Brind Dollar Fall

The period of steady appreciation for the USD has ended. The greenback experienced the essential drop the end of European trading hours. The trades closed at the level of 1.4364 against the EUR and 1.6284 against the GBP. The fall was reasoned by the following reasons: crude oil appreciation as a result of the global economy growth. The Gross Domestic Product (GDP) of the United States contracted 1.0 percent, better than 1.5 percent expected by the analysts. And it looks like the USD index will continue falling next few days.

The drop in GDP was the fourth straight one, the longest recession since quarterly records started in 1947. The world’s number one economy has shrunk 3.9 percent since last year’s second quarter. Yesterday`s report is the second of three estimates on Q2 growth. As more information becomes available the data will be revised again in September.

Strengthening of USD Positions

On Monday the greenback gained its positions versus major currencies traded in Forex market, from a string of recent declines after signals at the end of the week that CBs of different countries continued to carry out a policy of keeping their Interest Rates low for the near future. Technical analysis experts continue to expect that at some point signs of strength in the U.S. economy will be treated as positive for the nation's currency, ending an inverse relationship since the period of financial recession, where negative news performed a negative influence on purchasing the U.S Dollar.

The US currency also appreciated yesterday versus the EUR and Japanese Yen as Wall Street halted earlier gains and traders shifted their trading positions ahead of U.S. consumer and Housing data to be released this week. Solid U.S. data and probable reappointment of Federal Reserve Chairman Ben Bernanke pushed investors to carry out riskier transactions at the expense of the JPY and USD.

Bullish Stock Market Sentiment Brings Dollar Decline

The US Dollar ended up yesterday`s trades at the lowest level for this year against the Euro. This decline was caused by decline in US equities and pessimistic services sector figures. The greenback also slid 0.2 percent versus the JPY reaching the level of 95.02 from Tuesday`s mark of 95.25.

The broad decline of the Dollar is spurred by rally of high yielding assets such as shares and commodities. As economists and experts of technical analysis stated the Dollar's inverse relationship with trader appetite for risky assets has reasserted itself in last weeks. The USD has also lost its position as equities started a strong global rally and investors rushed into assets perceived as higher yielding ones.

Optimistic figures from China and the US boosted investors to sell Dollars choosing for trade risky assets making it complicated for the Dollar to rally a lot.

Recovery Signals Boost Dollar Decline

The US currency ended up trades with a slide as the US economy showed first signals of recovery after the global recession. Today the US government is set to release its figures of GDP expected to decline at a slower pace in 2Q than in 1Q. Global corporate earning reports added to optimism. Participants of Forex market took advantage of the fresh optimism to choose higher-yielding currencies, such as the Euro and Aussie.

Yesterday Germany and the Euro-Zone issued better than expected reports on unemployment and consumer confidence bringing USD decline against EUR reaching 1.4128 level. The markets also witnessed the USD fall versus GBP as British consumer confidence showed optimistic results.

It is expected that today traders will go on trading with yesterday`s optimism. This behavior is expected to drive lower the USD index.

Dollar Continues Strengthening

The US currency continues gaining versus its main counterparts. Yesterday it came close to its 2 week high against the Euro. It also rose against the Pound and Yen.

The reason of such appreciation is a better than expected Core Durable Goods Orders monthly report accompanied by China`s statements that it will keep on maintaining loose monetary policy. It seems that investors were impressed by the 1.1% rise in the Core Orders during June. The difference between the two reports is that the Core report measures the change in the total value of new purchases orders placed with manufacturers for durable goods, excluding transportation items. Orders for aircraft are known to be very volatile, and thus have the potential to distort the underlying trend.

Traders usually tend to pay more importance to the Core report as purchases orders placed with manufacturers for durable goods such as orders for aircraft are known to be very volatile. This report shows signs of positive growth, for the third straight month making investors believe that the global recession is coming to the end.

Among today`s news in economic calendar the main release from the U.S economy looks to be the weekly Unemployment Claims report at 12:30 GMT. Currently, while all the major economic indicators of the U.S economy are showing signs of recovery, it is only the job sector which goes on producing negative results.

Rising Star for AUD

Now, AUD reached its highest position relatively to USD. 1 Aussie cost 83.22 U.S. cents and it is expected that forex trading will bring AUD to its 2009 high.

Aussie’s rise relatively to USD was provoked by the optimistic declaration of Glenn Stevens from Reserve Bank of Australia that Australian economy was recovering faster than economists supposed, has provoked Besides, RBA representative marked that home prices should go up because of the fact that interest rates are low. In their turn, interest rates fell to 3 % because of suspicions that RBA could reverse its monetary policy.

But, it is necessary to notice that at the moment dollar positions on forex market went down not only against the Aussie. Dollar became weaker in comparison with the most part of other major currencies. For example, now people buy 94.87 yen for one dollar, and at the beginning of the week it was 95.26.

The index of American currency fell from 78.684 to 78.451.
As for EUR, now one EUR costs 1.4277 dollars (it rose from 1.4235). Pound costs $1.6533 ($1.649).