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Markets Unfazed by U.S. Jobs Figures as Pound Plunges

U.S. benchmark crude was up 2 cents at $50.46 a barrel
By The News · 07 of October 2016 08:36:45
A currency trader stretches at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, A currency trader stretches at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Tuesday, Oct. 4, 2016. Asian stock markets were mostly higher Tuesday as concerns about Deutsche Bank's financial health eased and Japan's quarterly survey showed companies lowered their inflation outlook. (AP PA currency trader stretches at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea), photo: AP

Solid, if uninspiring, U.S. jobs data had little impact on financial markets Friday on a day when much of the focus was on the British pound, which briefly and mysteriously plummeted to a new 31-year low against the dollar.

KEEPING SCORE: In Europe, Germany’s DAX was down 0.3 percent at 10,529 while the CAC-40 in France fell 0.2 percent to 4,469. The FTSE 100 index of leading British shares bucked the trend in Europe, rising 1.1 percent in the wake of the pound’s latest decline — a lower currency potentially makes British exports more competitive as well as boosting the value of foreign earnings when brought back to the U.K. U.S. stocks were poised for modest losses at the open with Dow futures and the broader S&P 500 futures down 0.2 percent.

U.S. JOBS: U.S. employers added 156,000 jobs last month, a decent gain but slightly below market expectations for a 170,000 increase. Jobs growth has averaged 178,000 a month so far this year, down from last year’s pace of 229,000. The figures may keep the Federal Reserve on track to raise the short-term interest rate it controls by December.

ANALYST TAKE: “Despite coming in slightly below expectation, September’s number is still strong and adds to this week’s raft of positive U.S. data,” said Paul Sirani, chief market analyst at Xtrade. “The world’s largest economy looks to be sailing full steam ahead to a rate hike before the end of the year.”

POUND POUNDED: The British pound tumbled sharply, slumping as much as 6 percent to its lowest level in more than three decades, before rebounding somewhat, although the reasons for the “flash crash” were unclear. The currency, which was trading at around $1.26 on Thursday, plunged to around $1.18 early Friday before recovering minutes later and was later trading around $1.24. Possible triggers cited by market watchers included a trader’s “fat finger” mistake, a rogue automated trading algorithm or comments to British media by French President François Hollande, who insisted the European Union must take a tough stance in negotiating Britain’s exit from the bloc’s tariff-free single market. In other currencies, the dollar eased to 103.83 yen from 103.96 yen and the euro slipped to $1.1117 from $1.1139.

ENERGY: Oil hovered at a three-month high. U.S. benchmark crude was up 2 cents at $50.46 a barrel while the international standard, Brent, fell 9 cents to 52.42 a barrel.

CURRENCIES: The euro was up 0.1 percent at $1.1152 while the dollar was down 0.4 percent at 103.54 yen.