MW: Data on German employment buoy euro as dollar retreats
By William L. Watts and Lisa Twaronite, MarketWatch
LONDON (MarketWatch) -- The U.S. dollar mostly slightly lower Tuesday, losing ground against the euro after Germany's jobless numbers fell for a 14th consecutive month.
The dollar index (DXY 82.95, -0.22, -0.26%) , a measure of the U.S. unit against a basket of currencies, stood at 83.020, down from 83.184 late Monday.
The yen, meanwhile, shrugged off more tough talk from Japan's top finance official, strengthening further against the dollar as traders appeared increasingly assured that authorities wouldn't act to back up implied threats to stem the currency's rise.
Foreign-exchange traders also are looking across the Atlantic in anticipation of data on regional purchasing managers' activity in the Chicago area as well as U.S. consumer confidence, along with the minutes of the latest meeting of the Federal Reserve's rate-setting Open Market Committee.
The euro (EURUSD 1.2724, +0.0064, +0.5055%) bought $1.2690 compared with $1.2664 65 in late North American trading on Monday, while the British pound (GBPUSD 1.5383, -0.0076, -0.4916%) changed hands at $1.5405, down 0.4%.
The dollar (USDYEN 84.3100, -0.3100, -0.3663%) fell to ¥84.47, down from ¥84.65 late Monday. The euro (EURYEN 107.2600, +0.1000, +0.0933%) bought ¥107.20, up from ¥107.07.
Germany's federal labor office said the seasonally adjusted number of unemployed workers fell by 17,000 in August, while the unemployment rate was unchanged at 7.6%. Economists had forecast a decrease of 20,000 in the number of people without jobs, while the unemployment rate in the largest European economy came in in line with expectations. Read about unemployment data.
While the decline in the number of jobless was below expectations, the data "nevertheless showed a steady improvement in the labor market suggesting that the rebound in Germany continues albeit at a slower pace as global growth concerns begin to weigh on German producers as well," said Boris Schlossberg, director of currency research at GFT.
Separately, the European Union statistics agency Eurostat said the euro-zone unemployment rate stood at 10% in July, unchanged from the previous month and in line with forecasts.
Eurostat also said August consumer price inflation in the euro zone slowed to a 1.6% annualized pace in August from 1.7% in July.
Economists had forecast a slower pace at 1.5%. Inflation remains below the European Central Bank's target of just less than 2%.
Meanwhile, Finance Minister Yoshihiko Noda said that the recent uptrend in the Japanese yen was worrying.
"Current foreign-exchange movements are one-sided," Noda said during a regularly scheduled news conference, according to Dow Jones Newswires.
"As I've been saying, my fundamental stance is that excessive fluctuations or disorderly movements in exchange rates have a negative effect on the stability of economies and financial markets. Based on this stance, we will monitor the market with great interest, and we will take decisive steps when that becomes necessary," he said.
After the yen reached a 15-year high against the dollar last week, the Bank of Japan held an emergency policy meeting Monday and took further easing steps. But that, and verbal warnings from Noda and other officials, had no lasting effects.
"Noda's jawboning was ignored & USD/JPY continues to trade heavily after the BOJ underwhelmed," said Sue Trinh, senior currency strategist at Royal Bank of Canada.
