Friday, January 09, 2004

The Reverse Midas Touch At Work Again 

A Tale of Two Countries:
Poor U.S. Jobs Data Send Dollar Sharply Lower
The dollar plunged to new lows Friday, with fragile sentiment toward the beleaguered currency dealt a further blow by a surprisingly weak U.S. employment report.

The dollar began sinking as soon as the data showing only 1,000 jobs were added to nonfarm payrolls last month hit the wires. Economists had expected a rise of 150,000, with most expecting the balance of risks to the upside...

The main drag for the dollar is the impact a weak labor market has on interest rates because expectations of rates staying low mean the dollar will likely remain weak.

"This is unambiguously bad for the dollar, not just because of the number itself, but because of the implications it has for U.S. interest rates," said Rebecca Patterson, senior currency strategist at JP Morgan in New York
Canadian Economy pumps out jobs
The Canadian economy finished 2003 on a strong note, generating new jobs at more than twice the expected pace in December, Statistics Canada said Friday.

The report — described by analysts as unambiguously strong — was also seen as giving the Bank of Canada licence to take a more moderate approach to interest rates when it makes its next decision on whether to cut borrowing costs later this month.

And remember, Canadians had SARS, mad cow, wildfires and power outages. The world's most powerful economy had Bush. Do the math.

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