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Dollar Rises as Nonfarm Payrolls Drop Fast

July 2, 2009 by

EUR/USD declined past the yesterday’s open level today as the currency traders reacted on the deeper than expected drop in the U.S. nonfarm payrolls. Worsening of the employment market situation spurs speculations that the recovery from the current crisis may be quite far from now. Going into more risky currencies isn’t a good choice in this case. EUR/USD is now trading near 1.4010.

Nonfarm payrolls declined by 467k in June, following 322k drop in May. The payrolls were expected to go down by 365k according to forecasts. Overall unemployment rate increased from 9.4% to 9.5%.

Initial jobless claims were at 614k last week, down from 630k reported a week earlier. The report went out almost matching the forecast which was at 615k.

Factory orders increased by 1.2% in May, following 0.5% rise in April (revised negatively from 0.7%). The market expected a 0.9% increase.

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