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01:30 Australia Employment Change s.a. (Aug) -9.7 10.0K -0.1K 3
01:30 Australia Unemployment Rate s.a. (Aug) 5.3% 5.1% 5.1%
The dollar strengthened before President Barack Obama unveils proposals to spur job growth and the U.S. economy.
“To announce a broad program to fight unemployment is always something that might be perceived as dollar positive by the market,” said Lutz Karpowitz, a senior currency strategist at Commerzbank AG.
Obama, facing re-election in 2012, will address a joint session of Congress today on proposals to speed job creation that may inject more than $300 billion into the economy next year.
San Francisco Fed President John C. Williams yesterday cut his growth forecast for the rest of 2011 and said the economy probably won’t be able to expand enough to bring down a 9.1% jobless rate soon.
The U.S. economy grew at a 1% annual rate in the second quarter, and unemployment remained stuck at 9.1% in August as job growth stagnated. Confidence among consumers plunged last month to the lowest level in more than two years.
Demand for the euro was limited on speculation the ECB will lower inflation and growth forecasts and signal a pause in interest-rate increases at today’s meeting in Frankfurt.
“The situation surrounding the euro hasn’t changed at all,” said Masahide Tanaka, a senior strategist at Mizuho Trust & Banking Co. “If Trichet downgrades his inflation outlook, the market will price in a halt in interest-rate increases, weighing on the euro.”
The Australian dollar trimmed yesterday’s 1.7% surge against its U.S. counterpart after the statistics bureau said that employers unexpectedly shed jobs for a second consecutive month in August. The number of people employed fell by 9,700, compared with the median estimate for a 10,000 increase. The jobless rate climbed to 5.3%, the highest since October, from 5.1% in July.
EUR/USD printed lows on $1.4050 before set stable between the $1.4060/90 range.
GBP/USD tested $1.5920 before recovered to $1.5942.
USD/JPY fell from Y77.42 to Y77.29.
The main events of the day - rate decisions from BoE and ECB at 11:00 GMT and 11:45 GMT respectively.
At 12:30 GMT Canada's and US Trade Balances are due to come.
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