Binary Options News : December 8, 2013
5 year Low US Jobless Rate Spurs Tapering Talk
At the end of a busy week, packed with central bank rate decisions and speeches, the final trading session in the US was dominated by the news that US unemployment fell to 7%, down from 7.3% which is the lowest it has been for 5 years.
203,000 jobs were created in the world’s largest economy in November, surpassing market expectations for a 180,000 gain and higher from the downwardly revised 200,000 increase in the previous month as the US economy showed further encouragement of signs of strength. The key non-farms rolls data is closely watched by analysts, more so as traders look for signs when the Fed will begin to taper its $85 billion a month asset purchasing programme, with expectations growing that Federal Reserve will start to unwind its huge monetary stimulus scheme in the coming months.
Previously, outgoing Fed Reserve Chairman Ben Bernanke has stated that when the unemployment rate fell below 7%, the tapering will begin and the positive jobs data follows on from a string of better than expected data from the US, including U.S. consumer credit which increased more than expected in November, official data showed on Friday.
The boost in jobless numbers helped push US Stocks higher with the Dow Jones Industrial Average finishing 1.26% higher, the S&P 500 index closing up 1.12%, and the Nasdaq Composite index ending the session up 0.73%. Earlier during the day, European indices also finished higher with France’s CAC 40 ending up 0.72%, Germany’s DAX 30 closing 0.96% higher and the UK’s FTSE 100 ending up 0.83%.
The US Dollar was down against all its major currency pairings except against the JPY, with the USD/JPY rising 1.03% after dovish statements from the BoJ indicated further declines ahead for the Japanese Yen as Japan fights inflation. A late bout of profit towards the close of the US session kept gains in check but still the USD fell 0.29% against the EUR, 0.07% against the GBP – which was supported by better than expected housing data. The greenback closed down 0.52% against the CHF, 0.46% against the AUD and 0.20% against the CAD.
Heightened speculation that the Fed will begin tapering soon, helped push precious metals lower with Gold falling 0.28% and Silver dropping 0.39%. Late session profit taking saw Natural Gas reverse earlier gains to be 0.19% at the close of trading on Friday, although more cold weather is forecast so the drop is expected to be temporary. Crude Oil rose 0.40% on the robust jobs report indicating a stronger US economy with therefore increased demand for oil in the future.
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