by Wachovia Research Team
Wachovia
Traders' reluctance to take large positions ahead of a major US employment report resulted in the dollar remaining relatively unchanged yesterday against a basket of major currencies. The euro strengthened against the US dollar as investors bought the currency following the European Central Bank's (ECB) rate cut. Investors praised the ECB for its proactive efforts to avoid a deep recession in the Euro Zone. The British pound, however, did not strengthen like the euro, even though the Bank of England cut rates to their lowest level since 1951. The pound ended the day marginally lower as investors remained concerned about the health of the British economy. Lower oil, metal, and other commodity prices weighed heavily on the Canadian dollar yesterday, causing it to depreciate materially.
Most currencies are largely unchanged overnight and this morning as traders await US economic data. The euro and New Zealand dollar are down slightly from yesterday's close, while the pound and Australian dollar remain at the same levels. Meanwhile, the Canadian dollar continued to depreciate after poor economic data showed that Canadian employment fell the most since 1982.
Major economic releases today include US Nonfarm Payrolls and the US Unemployment Rate.
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