US dollar: Risk-off big time as USD is seen 'reaching for the sky' after US non-farm payroll disappointment
- Category: US Dollar Exchange Rate
- Published on Friday, 01 June 2012 13:19
- Written by Sam Coventry
"US and German yields are reaching for the ground, while the USD is reaching for the sky, having only the Yen above." - Bank of America Merrill Lynch Reasearch.
The US dollar (Currency:USD) remains in greater demand on the global financial markets this afternoon, particularly after it was shown the US economy is decidedly not rebounding.
(We have just uploaded the latest FX forecasts from UniCredit to our IMT site, Free access is granted via the Facebook gateway)
A quick look at the spot exchange rates shows the euro dollar is 0.21 pct lower on yesterday's closing level.
The pound dollar exchange rate is 0.5 pct lower at 1.5327.
"Risk-off big time," says an exchange rate outlook note from Bank of America Merrill Lynch Research, ‘safe havens’ are in high demand."
"US and German yields are reaching for the ground, while the USD is reaching for the sky, having only the Yen above. Our Technical Corner argues that the risk off environment remains the dominant theme until the VIX reaches a minimum of 30%, with Treasuries continuing to outperform," say Bank of America.
The risk-off environment entrenched itself further this afternoon, lending further support to the US dollar, when it was shown that the May US non-farm payrolls data just out shows the US work force grew by 69 000 jobs in May, analysts had been expecting growth of 150,000.
Jason Conibear, Market Analysis Director at Cambridge Mercantile says:
"The markets wanted a coup de foudre. They got a coup de grace.
"Following a morning of weak PMIs, this stupendously poor non-farm payrolls data adds a funereal tone to markets as they slide towards June 17.
"A few months ago the feeling was that a strong China and resurgent US would steer the Eurozone through its current plight.
"Now the fear is that these economies could themselves be sucked into the rapidly spiralling Eurozone vortex.