Euro Drops on Greek Debt Concern - 6.2.2012

US Dollar On Friday investors were encouraged by the US employment statistics and boosted demand for stocks, sending the nation’s indices higher. S&P 500 gained 1.46% after Labor Department reported that companies added 243000 jobs in January, considerably more than economists initially estimated. At the same time unemployment rate decreased to 8.3%, reaching the lowest level in three years. The dollar strengthened against the yen, the franc and the pound as improvements in the labor market may suggest there is no urgency in additional stimulus package from the Fed. The loonie, as the Canada’s currency is nicknamed, advanced against the greenback to a three-month high (pair USD/CAD dropped to 0.9926), after the reading of favorable economic data in the US, the Canada’s biggest trading partner. Euro The euro was flat on Friday against the US counterpart, fluctuating around 1.3150, but fell below 1.3100 in Asian trading hours today amid continuing uncertainty over the Greek debt issue, as Greek policymakers failed to agree on further spending reduction required by international creditors. Luxembourg Prime Minister Jean-Claude Juncker said in an interview “If we determine that it’s all going wrong in Greece, then there won’t be a new program … and that means in March you’ll have a declaration of bankruptcy.” The euro slid to 1.3054 by the end of Asian trading hours before France sells 8.5 billion euros of bills today. Australian Dollar After touching on Friday its six-month high against the US dollar – 1.0795, the aussie fell back toward 1.0700 in Asian trading hours. A report showed today retail sales dropped unexpectedly in January by 0.1%, increasing the probability of an interest rate reduction by the Reserve Bank of Australia. The cash rate is currently at 4.25% and may be cut tomorrow to 4% for the third straight time if central bank decides to ease further its monetary policy.