Across The Board Highlights

The Pound Gains Against the Dollar

The dollar was weaker against the pound this week, trading at 1.636 on Friday. This was occasioned by official government reports in the U.S. showing continuing employment weakness in the country and unemployment rising a tenth of a point to 9.1%. The expectation of analysts this week had been that unemployment would remain the same as in the last report, at an even 9.0%. What was made clear by this data is that the economic recovery in the U.S. is moving less strongly than its already weak pace and that economic policy will remain unchanged for the foreseeable future. Expect interest rates in the U.S. to remain low for some time to come.

The Euro Has a Good Week and Comes Out on Top

Moody’s Investor Services downgraded its bond ratings for Greece once again and the result was a loss by the Euro against other major currencies. This flowed against a recent trend in which the Euro was able to hold its own, even in light of poor economic data. However, most of Europe was on holiday yesterday and the lack of economic activity moved investors toward safer haven currencies. Although relatively poor reports from other large economies have influenced investors, as well. The Moody’s report seemed to tip the scales. Expect support for the pair below 1.458.

The Dollar Weakens Against the Swiss Franc

The dollar, after holding its own for a couple of weeks, lost its momentum in the face of poor fundamental economic data out of the U.S. In comparison, reports show the Swiss economy gaining strength, and the country’s currency gained considerable strength with it. From the standpoint of relative currencies, the poor data from the U.S. can only mean continuing loose fiscal policy by the Federal Reserve and low interest rates remaining the norm there. With data in many sectors of the U.S. economy including housing, manufacturing, public confidence and employment all working toward whispers from some quarters of the possibility of a double-dip recession, the dollar could not hold its position and slipped accordingly.

The Dollar Drops vs the Yen After US Non-Farm Payrolls Lose Ground

In spite of the natural disasters inflicted upon Japan recently, the Japanese yen showed strength this week versus the dollar. The currency fluctuated during the week, but this seemed largely the result of a week-long holiday on the island, and with interest rates remaining low there, investors look toward an economic recovery from the recently reported contraction of the Japanese economy. Reports of weakness in the U.S. economy gave the yen yet another boost, and probably was the biggest driver of the pair. Expect support for the pair between 80.0 and 82.0.