Non Farm Employment Exceeds Expected &Nbsp; USD Pulled Back 10%

Last Friday, the United States released October. Non farm employment data Stronger than market expectations, this result is stimulating. US dollar rebounded sharply It saved part of the Federal Reserve's two quantitative easing. QE2 ) the fall of the policy.

Labor department data show that the United States in October before the change in the number of non-agricultural employment in 4 months of continuous downward trend has improved, the United States in October non farm employment growth of 151 thousand people, the expected growth of 60 thousand people, while 8, September data were also upgraded.

After the release of the data, the US dollar index rebounded to above 76.5. In the non US currencies, the euro dropped nearly 200 points against the US dollar and fell below the 1.41 mark, the most turbulent trend, and the US dollar against yen back to 81. The US dollar index fell sharply to near 75.6 low in recent years on Thursday, and the euro rose to 1.42 against the US dollar.

Nonfarm data are stimulating for the declining dollar, but analysts are cautious about improving the employment figures for the US dollar, and the dollar may not be able to extricate itself from the previous downturn.

According to the sub item data, the employment market in the US has improved remarkably. However, the unemployment rate in the United States remained at 9.6% in October, compared with last month. The unemployment rate in the United States has been above 9% for more than two years. In October, about 42% of unemployed people did not work for more than 6 months. Therefore, I am afraid the employment market situation can not be significantly improved at once.

When the United States released GDP data at the end of October, analysts generally pointed out that despite the third quarter expansion of the US economy, its degree still can not boost the job market, which is the main reason why the Federal Reserve will launch QE2.

Analysts believe that a data improvement may not be enough to shake up the impact of QE2 on the US dollar, but if more and longer data are tested, the Fed may reconsider the economic stimulus measures, and the US dollar may also take a turn for the better.

Analysts said that the strength of the dollar last Friday may be short-lived. Under the influence of QE2, the US dollar will continue to decline, and other currencies will continue to appreciate relative to the US dollar.

Economists point out that the Fed's actions do not solve the US economic problems, and the unemployment rate can not be reduced. QE2 is likely to aggravate global imbalances and cause inflation, and at the same time raise the tension in the foreign exchange market.

The analysis pointed out that the Fed's loose monetary environment caused the outflow of funds to pose a threat to other countries. The emerging market countries had to tighten their policies because of the influx of capital. Tightening policies led to further appreciation of their currencies, which would cause serious attacks on the exports of these countries.

Such as the euro, the yen, and so on, were also exhausted by the continued depreciation of the US dollar. The Japanese authorities had already warned against the appreciation of the yen and intervened in the market. Meanwhile, last week's data also showed that the number of German manufacturing orders decreased significantly.

Emerging market countries accuse the US of making policy decisions that will devastate the economic growth of developing countries. Not only that, German officials also point out that the efforts of the EU to stabilize the economy may be undermine by US policies.

For all the criticisms, Bernanke, chairman of the Federal Reserve, emphasized that the Fed did not intend to create inflation. The goal of QE2 was to stimulate the domestic economy. He also said that the Fed understood the impact of the US dollar on the global economy and the monetary system. When the US economy began to grow rapidly, it would provide the best support for the US dollar.