The dollar is currently little changed against its major competitors on Friday, following the release of the December jobs report, which was in line with expectations. The U.S. currency appears to have halted its strong gains from the previous 2 sessions against its European competitors, but has added to its gains against the Japanese Yen.
Employment in the U.S. increased in line with economist estimates in the month of December, according to a report released by the Labor Department on Friday. The report showed that non-farm payroll employment increased by 155,000 jobs in December following an upwardly revised increase of 161,000 jobs in November.
Economists had expected employment to increase by about 155,000 jobs compared to the addition of 146,000 jobs originally reported for the previous month.
The Labor Department also said the unemployment rate came in at 7.8 percent in December, unchanged from the previous month’s revised figure.
Economic activity in the U.S. service sector unexpectedly expanded at a faster rate in the month of December, according to a report released by the Institute for Supply Management on Friday, with the index of activity in the sector rising to a ten-month high.
The ISM said its non-manufacturing index climbed to 56.1 in December from 54.7 in November, with a reading above 50 indicating growth in the service sector. The increase surprised economists, who had expected the index to edge down to 54.5.
With a drop in orders for non-durable goods largely offsetting an increase in orders for durable goods, the Commerce Department released a report on Friday showing that new orders for U.S. manufactured goods came in essentially unchanged in November.
The report showed that factory orders edged up by less than a tenth of a percent in November following a 0.8 percent increase in October. Economists had been expected orders to increase by about 0.3 percent.
According to the minutes of the Fed Reserve’s most recent policy making meeting, which were released Thursday afternoon, voting members were concerned about the Fed’s ballooning balance sheet. However, the Fed continued to believe that its asset purchase plan should remain in place for at least the next few months.
Some members of the rate-setting Federal Open Market Committee thought asset buying would be warranted through most of 2013. A smaller number of officials project that the Fed should be able to end the program well before December.
The dollar rose to over a 2-week high of $1.2996 against the Euro Friday morning, but has since pulled back to around $1.3045.
The Eurozone downturn eased further at the end of the 2012, as rates of contraction in economic output and new business slowed, final data from Markit Economics showed Friday. The composite output index rose to 47.2 from 46.5 in November. But it stayed marginally below the flash reading of 47.3 and the 50.0 no-change mark for the eleventh successive month.
The services Purchasing Managers’ Index climbed to a five-month high of 47.8 in December from 46.7 in November. The index was unchanged from the earlier flash estimate and consistent with a solid reduction in output.
Eurozone inflation remained unchanged in December, defying economists’ forecast for a modest slowdown, as a smaller increase in energy costs was offset by higher food prices. EU harmonized inflation came in at 2.2 percent in December, unchanged from the November rate, preliminary data from the statistical office Eurostat showed Friday. Economists had expected inflation to ease to 2.1 percent in December.
Retail sales in Germany topped expectations in November as higher income expectations and unemployment, which is close to a two-decade low, boosted consumer spending. Sales increased 1.2 percent month-on-month on a seasonally-and-calendar adjusted basis in November, recovering from a 1.3 percent decline in the previous month. The outcome was better than the expected 0.8 percent growth.
Business conditions in the Germany private sector improved slightly less than initially expected in December, final data released by Markit Economics and BME Showed Friday. The composite output index, which measures performance of the manufacturing sector and the service sector, rose to 50.3 in December from 49.7 in November, indicating that the sector expanded modestly.
French service sector contracted at a faster pace in December, detailed results of the survey by Markit Economics showed Friday. The services activity index fell to 45.2 in December from 45.8 in November. In contrast, the preliminary report had shown an increase in the reading to 46, which meant a slowdown in the pace of decline in business activity.
The greenback advanced to nearly a 1-month high of $1.6001 against the pound sterling Friday, but has since eased back to around $1.6030.
UK’s service sector activity declined for the first time in two years in December as incoming new work dropped marginally amid reports of a challenging trading environment, data from a survey by Markit Economics and the Chartered Institute of Purchasing and Supply (CIPS) showed Friday.
The seasonally adjusted purchasing managers’ index for the service sector dropped to 48.9 in December from 50.2 in November. The index dropped below the no-change 50 mark for the first time since December 2010.
The buck has been rising steadily against the Japanese Yen since around December 10th. Over that time it has climbed from around Y82.500 to over a 29-month high of Y88.400 on Friday.
Japan’s service sector activity expanded at a slightly faster pace in December, a survey by Markit Economics revealed Friday. At the same time, confidence among service providers hit its highest level in five years. The headline Business Activity Index recorded a level of 51.5 in December, up slightly from 51.4 in the previous month.