The last month’s employment data for the United States showed 227,000 new jobs created. The figure is a bit lower than in January, but it confirms a steady trend in this variable economic recovery.
The unemployment rate remained unchanged at 8.3% as it was expected remaining still very high considering its lows as 5% in 2007 and part of 2008 but far below 10% reached in mid 2010.
The news was welcomed by the markets that imagined new period of economic growth in the world's leading power. While the last week’s agreement with Greek creditors gave the green light to rescue plan from the European Union, the markets across the Atlantic felt relief as well.
This agreement will help Greece to cover financial costs at least for a short period of time. It is crucial that the debt was written down, easing the situation with countries of the Southern Europe though the recession that lasted for 5 years remain unfinished. The decrease of the GDP by more than 20% in that period prevents the sustainable growth of the economy.
Anyway, this good news finished the week creating a positive atmosphere at the stock exchanges on Tuesday, resulting in the bullish behavior.
The dollar extends the upward trend against major currencies but without exceeding the maximums achieved in the previous day. In this regard, it can be said that the Australian dollar fell to its lowest since January 25.
The absence of macro indicators on Monday, and a certain tranquility that made the European market more stable as well as favorable data on U.S. jobs, contributed to the stability of some currencies.
On Tuesday the data concerning the UK trade balance was released indicating that the deficit grew less than expected. Thus, it helped the British pound to strengthen as the release at 8:30 Eastern the data concerning the U.S. retail sales. The major is not expected to change the trend and the increase by 1.1% in February will hardly affect the markets.
But the most important news are expected at 2:15 Eastern. The Federal Reserve headed by Ben Bernanke, is to announce the monetary policy. The interest rates are expected to remain unchanged through 2014 as it was announced before. The latter statement gives good stimulus to the market movements.
With a more stable labor market, unemployment rate fell to 8.3%, and with Bernanke’s skepticism on the slow pace of the economic recovery, this statement will give light on the next events. In general the Fed is not expected to place funds into the economy in quite unfavorable circumstances like this. The risk of doing can lead to severe increase in inflation, which would change the prudent policy that implements the Fed.
However, the impact will be felt by the market and a drop in U.S. stocks that is expected soon can stimulate the growth of the dollar against other currencies.
