Fed Isolates Weather From Weakness as Growth Cools: Economy

This year’s harsh winter is causing the pace of U.S. economic growth to fall along with the mercury.

February payrolls may be the next victim of the severe weather that has gripped the country during the last three months, following disappointing data on retail sales and manufacturing in January. This week’s snow and ice storms in the eastern U.S. came during the period the Bureau of Labor Statistics refers to in its monthly employer survey, which it uses to calculate changes in payrolls, hours and earnings for the jobs report scheduled for release March 7.

That may make it difficult for Federal Reserve policy makers to gauge whether signs of weakness can be chalked up to the elements, or if the economy has taken a turn for the worse. Firms from Goldman Sachs Group Inc. to Morgan Stanley have reduced their estimates for first-quarter U.S. growth, after forecasters entered the year with the most optimism since 2010.

To be counted as employed in the BLS survey, workers on non-farm payrolls must have received pay for some part of the earnings period that includes the 12th of the month. The winter storm may affect the February survey results if large numbers of workers had to stay home for the entire period without pay and weren’t counted.

(Source: Bloomberg)

Euro Falls Most in 2 Months as Rally Overheats; Yen Snaps Losses

Berita Jalatama : The euro fell the most against the dollar in two months amid speculation its six-month rally was due for a pause even as data signaled improvements in the European economy.

The yen snapped nine weeks of losses as Japanese Prime Minister Shinzo Abe said Jan. 1 the nation was halfway to escaping deflation. New Zealand’s dollar advanced against all 16 major counterparts on bets for an interest-rate increase. Federal Reserve Chairman Ben S. Bernanke said the U.S. is poised for faster growth before a Jan. 10 report forecast to show 195,000 jobs were added in December.

The euro dropped 1.2 percent to $1.3589 this week in New York after reaching $1.3893 on Dec. 27, the strongest level since October 2011. The greenback fell 0.3 percent to 104.86 yen after rising to 105.44 on Jan. 2, the weakest level since October 2008. Japan’s currency climbed 0.6 percent to 142.48 per euro.

The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, rose 0.3 percent to 1,026.23, the third-straight weekly rally.

(Source: bloomberg)

Dollar Rises to Two-Month High as Employment Gains Top Forecasts

 The dollar climbed to an almost two-month high after a Labor Department report showed the economy added more jobs than forecast last month, boosting bets the Federal Reserve will reduce stimulus.

The greenback gained against all of its 16 most-traded peers except Mexico’s peso as payrolls grew by 204,000 in October, versus the median forecast in a Bloomberg News survey for a 120,000 advance. The euro extended its biggest two-week decline in more than a year versus the dollar as Standard & Poor’s lowered France’s credit rating after an interest-rate cut in the region yesterday. The peso erased losses after policy makers signaled the end of rate reductions.

The Bloomberg U.S. Dollar Index rose 0.5 percent to 1,021.66 at 5 p.m. in New York. It touched 1,024.31, the highest since Sept. 13, as it breached 200-day and 100-day moving averages.

The dollar rose 0.4 percent to $1.3367 per euro after appreciating to $1.3296 yesterday, the strongest level since Sept. 16. The euro added 0.6 percent to 132.42 yen. The greenback rose 1 percent to 99.05 yen.

The common currency has dropped 3.3 percent over the past two weeks, the biggest such slide since July 2012.

(Source: Bloomberg)