The dollar extended its gains broadly after a run of strong US economic data this morning. The euro dropped to as low as 1.3550 and the sterling fell to 1.9858 versus the dollar.
The weekly jobless claims fell unexpectedly by 21k to 305k, the lowest since January. Productivity grew 1.7% in the first quarter, beating the estimate of 1.0%. The fourth quarter reading was revised from 1.6% to 2.1%. The labor cost rose only 0.6% in the first quarter, far below the 4.0% estimated growth rate. Besides, US non-manufacturing ISM rose from 52.4 to 55 in April, beating the forecast of 53. These numbers indicated solid growth and contained inflation, which are ideal for the economy.
All eyes will focus on the April employment report from the US Labor Department tomorrow morning. Non-farm payrolls are expected to drop from 180k to 100k, and the unemployment rate is seen up from 4.4% to 4.5%. The market is likely to keep cautious ahead of this key report.
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