US Unemployment Fell to 7.7% - 10.12.2012

After encouraging employment statistics have been issued in the USA and Canada last Friday, investor sentiment improved today as strong data came from China. Asian shares rose and almost all major stock indices closed in positive territory. As for the data from China, industrial production increased in November by 10.1% in annual figures, while retail sales grew by 14.9%. November foreign trade data of the second world economy turned out more modest: trade balance surplus decreased to 19.6 billion dollars (previous: almost 32 billions), while exports increased only by 2.9% in annual figures (previous: 11.6%). In the US non-farm payrolls increased in November much more than expected – by 146000, the Labor Department reported (see chart). Unemployment at the same time dropped to almost a 4-year low, reaching 7.7% (previous: 7.9%). In Canada labor market statistics also was better than forecasts predicted: employment rose by almost 60000, while unemployment rate fell to 7.2% (previous: 7.4%). The Canadian dollar managed to recover against the US counterpart on Friday, today the pair USDCAD has been trading in a narrow range 0.9865-0.9878, at 7-week lows. USA: non-farm payrolls, unemployment The US dollar strengthening moderated on Friday in the evening amid growing investor optimism. Another factor which could limit dollar growth potential now is the Federal open market committee meeting on December 11-12. The question is whether the November labor data can influence the Committee’s stance on further monetary easing, as a new round of bond purchases is expected to be launched. The euro fell against the dollar on Friday to a two-week low 1.2875, today the currency pair is trading close to 1.29.