By: Sara Patterson
Friday’s US nonfarm payroll reports reflected the creation of 120,000 new jobs in March – the smallest increase since October, and a marked letdown from the 200,000 new positions that were expected. The report lead to questions as to the true stability of the US dollar, causing Asian markets to open lower on Monday. The dismal NFP report again fueled speculation that the Fed may attempt to ease the troubled economy or launch another bond-buying program. Equally dismal news came out of China in recent days, as steep rise in China’s Consumer Price Index for March sent mainland indexes widely lower. The CPI was up 3.6% from the previous year, though analysts expected only a 3.3% increase.
The greenback hit a one-month low against the yen, hitting a low of 81.19 at one point, while the euro continued to flounder during the Asian session. The common currency neared 106.17 yen and it also hit a 3 week low against the dollar at $1.3033. The Swiss franc strengthened to above 1.20 against the euro, sparking speculation that government leaders may attempt to weaken the currency.
As the euro continues to flounder and the yen continues to strengthen, analysts are on close watch pending the conclusion of this week’s Bank of Japan policy meeting on Tuesday, a precursor to a meeting later this month in which the BOJ will announce its long-term economic policy.