Currency market participants were focusing on the implication of ECB’s Trichet comments yesterday. The reference to “strong vigilance” and explicit refusal to indicate that “rates are appropriate” are understood as powerful signals of the ECB’s intent to raise rates as early as next month.
Today, the Swiss franc pushed back from a two-week low against the euro and rose against the dollar after Swiss National Bank Vice-Chairman Thomas Jordan said low interest rates were not sustainable in the medium term.
Higher European interest rates allow the Euro to continue to rally and edge close to 1,.40 against the US dollar.
As comments continue to become more hawkish in Euro, the Jobs data in the US was the main attraction for traders.
The Department of Labor released their employment report. Nonfarm payrolls rose by 192,000 in February as private-sector employers added 222,000 jobs,. The January number was revised to show an increase of 63,000 jobs from a previous estimate of 36,000. The unemployment rate, which is obtained from a separate household survey, fell to 8.9% last month, the first time it dipped below 9% since April 2009.
The improvement follows a mixed report from January, when payroll numbers were distorted by bad weather. Economists had forecast February payrolls would rise by 200,000 and that the jobless rate would inch up to 9.1% from the previous month’s 9.0%.
Markets did face headwinds as oil markets continued to rally and placed downward pressure on the US and European equity markets. Oil prices in the US rallied more than $3 dollars per barrel, and in after hours trading touch nearly $105 per barrel.
