Dollar tumbles after weak data shakes market
By Jennifer Hughes in New York
Published: August 6 2004 11:01 | Last updated: August 6 2004 13:00
The dollar tumbled more than a cent against the euro on Friday following weak payrolls data that undershot even the most gloomy forecasts. It was the second month in a row that the key figures were weak.
Witihin minutes, the euro, at $1.205 as the data were released, had leapt to $1.222 against the greenback.
Just 32,000 jobs were created last month, according to the report, compared with analysts expectations of more than 200,000. Moreover, the June report was revised down to show 78,000 new jobs from 112,000 reported previously.
The unemployment rate, calculated from a different survey was unchanged at 5.6 per cent.
Analysts said the numbers cast doubt on market convictions that a soft month for the economy in June would be replaced by a rebound in July.
“Assertions, our own included, that June’s disappointment was an aberration are clearly more difficult to defend in light of July’s massive shortfall,” said Daragh Maher, strategist at ING Financial Markets. “This is unlikely to prevent the Fed from hiking 25bp next week, but expectations for the pace thereafter will be pared back substantially.” |
