Daily Afternoon Report 04/09/2015
The euro pared gains against the U.S. dollar today, as positive U.S. employment data and comments by Richmond Federal Reserve President Jeffrey Lacker added to expectations for a near-term U.S. rate hike. The Labor Department said the U.S. economy added 173.000 jobs in August, disappointing expectations for an increase of 220.000. The number of jobs created rose by 245.000 in July, whose figure was revised from a previously estimated gain of 215.000. The report also showed that the U.S. unemployment rate fell to 5.1% last month from 5.3% in July, compared to the expectation for a downtick to 5.2% in August. It was the lowest level of U.S. unemployment since April 2008. U.S. average hourly earnings rose by 0.3% in August, beating expectations for an uptick of 0.2%, after a 0.2% increase the previous month. The greenback also received support after Richmond Fed President Jeffrey Lacker said today that the U.S. economy no longer needs interest rates near zero, fuelling further speculation over a possible rate hike as soon as this month.
Meanwhile, elsewhere, the single currency remained under pressure after the European Central Bank indicated on Thursday that it could expand its quantitative easing program amid increased downside risks to its inflation outlook. The ECB lowered its forecast for growth and inflation, citing oil prices and slowing growth in China. Earlier Friday, official data showed that German factory orders declined by 1.4% in July, compared to expectations for a 0.6% slip. Factory orders increased by 1.8% in June whose figure was revised from a previously estimated gain of 2.0%.