The dollar is maintaining the early gains it posted against the Japanese Yen at the start of the new trading week. However, the U.S. currency is slightly weaker against its major European competitors.
The recent string of strong U.S. economic reports, including Friday’s stronger than expected jobs report for November, has investors preparing for the Federal Reserve to begin tapering its stimulus measures, perhaps as early as at its December meeting.
Non-farm payroll employment rose by 203,000 jobs in November following a revised increase of 200,000 jobs in October. Economists had been expecting employment to increase by about 180,000 jobs compared to the addition of 204,000 jobs originally reported for the previous month.
With the stronger than expected job growth, the unemployment rate pulled back to 7.0 percent in November from 7.3 percent in October. The unemployment rate had been expected to dip to 7.2 percent.
The dollar jumped to an early high of Y103.213 against the Japanese Yen early Monday morning and has continued to hover around the Y103.200 level.
Japan’s gross domestic product was up just 0.3 percent in the third quarter of 2013 compared to the previous three months, the Cabinet Office said in Monday’s revised reading, expanding for the fourth straight quarter. That missed forecasts for 0.4 percent and was down from last month’s preliminary reading for a 0.5 percent increase.
Japan posted a current account deficit of 127.9 billion yen in October, the Ministry of Finance said on Monday. That missed forecasts for a surplus of 148.9 billion yen following the 587.3 billion yen surplus in September.
Japan’s economy watchers’ assessment of current situation as well as expectations improved in November, survey data from the Cabinet Office showed Monday. The indicator reflecting assessment of the current economic conditions rose to 53.5 in November from 51.8 a month ago.
The European Central Bank has several monetary tools at its disposal to apply if the situation demands, but cautioned that government bond purchases would pose immense challenges, Executive Board member Yves Mersch said Monday.
At a conference in Frankfurt, Mersch said, “Should the need for further monetary measures arise, the necessary tools are available.”
The dollar has been on a downward trend against the Euro for nearly a month and has dipped to a low of $1.3730 on Monday, its lowest level since late October.
Eurozone investor sentiment declined unexpectedly in December from a two-and-a-half year high, a monthly survey by the think tank Sentix showed on Monday. The confidence index came in at 8 points in December, down from 9.3 in November. The reading was forecast to rise to 10.3.
Casting doubt over the sustainability and strength of recovery, German industrial production declined for the second consecutive month in October with contractions in all sub-sectors. Moreover, exports from the largest euro area economy slowed notably in October. Industrial production fell unexpectedly by 1.2 percent month-on-month, while it was forecast to rise 0.7 percent, data showed Monday.
Germany’s trade surplus declined more than expected in October, data from the Federal Statistical Office revealed Monday. The trade surplus fell to EUR 17.9 billion in October from EUR 20.3 billion in September. Economists expected a decline to EUR 18.3 billion.
France’s central bank on Monday revised its outlook for fourth quarter gross domestic product growth upward, while business sentiment recorded an unexpected improvement in November.
According to a monthly business survey published by the Bank of France, the economy is seen growing 0.5 percent in the fourth quarter of 2013, up from 0.4 percent growth forecast earlier.
The business sentiment indicator for the manufacturing sector rose to 101 in November from 100 in October. Economists had forecast a decline to 98.
The buck has pulled back from Friday’s high of $1.6292 against the pound sterling, to around $1.6390 on Monday.
Demand for staff in the U.K. increased at the sharpest rate since July 1998, largely driven by strong trends in private sector, the Report on Jobs released by Markit and consultancy firm KPMG showed Monday.
Meanwhile, the availability of candidates to fill permanent roles fell further in November, with the rate of decline quickening to the sharpest since July 2007. Likewise, temporary/contract staff availability decreased, at the fastest pace in nine years.