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Video for May 8th, 2008 (4 min 15 sec): Euro Rallies Overnight After Finding Support, ECB & BOE Decisions 

NZ Employment Change Falls 1.3% in 1st Quarter, Unemployment Rat Rises 

The labor market loosened in New Zealand during the 1st quarter. Employment decreased by 1.3%, or 29K on a seasonally adjusted basis. The unemployment rate notched up 0.2% to 3.6%.

AUS Employment Increases by 25.4K, Unemployment Rate Increases as More Australians Entering Labor Market

For the 18th consecutive month, the Australian workforce added jobs to the economy. For April, the economy created 25,400 jobs, doubling expectations. The unemployment rate rose to 4.2%, but came as a result of an increase in the participation rate.

NZD/USD - Kiwi Tumbles vs Greenback on Employment Rate

 

The New Zealand Dollar - US Dollar pair tumbled around 100 pips in the 2 hours following the disappointing employment report. The pair consolidated in a 40 pip range hovering near .7720 during the rest of today's session. The pair has now reversed the 2 session uptrend that ended on Tuesday with a 200 pip swing in the greenback's favor.

GER Production Down 0.5% for March, and Slows to 4.7% Annual Pace

In Germany industrial production declined 0.5% for the month of March, and the annual pace cooled to 4.7%. The global slowdown and the higher euro are starting to take a toll on production which had been holding up the previous 3 months.

GER Trade Surplus Deteriorates as Exports Shrink for 2nd Month

A second release revealed that German exports declined for a second straight month in March while imports expanded, lowering the trade surplus to €16.7 billion. Though the numbers surprised forecasts, today's production data and other recent data signal that Germany's economy is losing its momentum.

EUR European Central Bank Holds at 4%, Inflation Main Concern

Later in the European session the European Central Bank concluded its interest rate meeting and kept interest rates at their 6-year high of 4%. ECB President's statement said that inflation will remain high for some time, and that combating it in the medium term is the main priority.

UK Bank of England Holds Rates at 5%, Cut Eyed in Next Meeting

The Bank of England, held rates at 5%, after cutting by a quarter percent in their prior meeting. It has lowered rated rates 3 times since December and is expected to move to ease borrowing costs in its meeting next month. Policy makers are lowering rates gradually as inflation risks continue to pose a problem.

EUR/GBP - Euro Strengthens on Interest Rate Outlook

 

The Euro-Pound pair was down to start the global session, and fell further after the German data. The pair found support near .7820 and continued to rally as the 2 central banks announced their decision. The Euro continued gaining into the US open, a rally of 60 pips.

EUR/USD - Euro Rallies From 1.5290 on ECB Stance on Inflation

 

The Euro-Dollar pair found support overnight near 1.5290, after it had slipped almost 300 pips from its high this week. From that new low, the Euro rallied 140 pips, stalling in mid NY trading at an intra-day high of 1.5440.

The Pound-Yen pair sank to a low of 202.40 overnight, rebounded, and then fell again to retest that low. The pair is down 500 pips since Monday and today's low was the weakest the Pound has been in 3 weeks.

US Jobless Claims Fall 18K

In the US, weekly jobless claims fell 18K to 365K. The four-week moving average, which smoothes out volatility seen week to week, increased as firms see higher costs and lower sales on the horizon.

USD/JPY - Yen Strenghens on Rocky Asian and European Stocks

 

The Dollar continued its slide against the Yen, swinging about 140 pips lower from its overnight high near 105. The Yen was boosted by weaker investment sentiment in Asian and European stock markets. US stocks were higher by mid-day after a steep fall yesterday, on the back of Wall Mart and other retailers. 

CAN Housing Starts Weaken 12% in April

Finally, in Canada, the annual rate of housing starts fell 12%, though February and March's totals were rather high. Starts remained above the 200K units.

USD/CAD - Greenback Rallying After Finding Support at Parity

 

US Dollar-Canadian Dollar pair continued its rally from yesterday when the pair touched parity. On Tuesday the pair surged in the Loonie's favor thanks to record high oil prices and better fundamentals.  Today's data, better jobs in the US and weaker starts in Canada, acted to support the greenback.

Upcoming Releases

Tomorrow, Canada will reveal its employment report and both Canada and the US post trade balance figures.