Dollar Falls as Report

Dollar Falls as Report Shows U.S. Jobs Growth Slowed

The dollar fell from a 14-month high after a report showed employers added the fewest jobs this year in August, damping speculation the Federal Reserve will raise interest rates sooner than anticipated.

The Bloomberg Dollar Spot Index pared a weekly gain after Labor Department data showed
employment grew by 142,000 jobs, versus a Bloomberg survey forecast of 230,000. The yen gained from the weakest level in almost six years and the euro rose from almost a 14-month low. The currencies fell yesterday as the Bank of Japan maintained its unprecedented stimulus and the European Central Bank cut interest rates.

“The headline payrolls number wasn’t so strong, and I think you saw the dollar come off a bit on the back,” said Robert Lynch, a currency strategist at HSBC Holdings Plc in New York. For euro-dollar, “the ECB developments are still the more important factor.”

The Bloomberg Dollar Spot Index fell as much as 0.3 percent to 1,036.55 before trading at 1,038.18 at 5 p.m. in New York, down 0.1 percent. It advanced earlier to 1,041.58, the highest since July 2013. The gauge rose 0.9 percent this week.

The yen rose 0.2 percent to 105.09 per dollar after depreciating earlier to 105.71, the weakest since October 2008. The euro gained as much as 0.3 percent to $1.2988 before trading at $1.2951. It touched $1.2920 yesterday, the lowest level since July 2013.

Peso, Pound

The Chilean peso climbed the most among the U.S. dollar’s 31 major peers after data showed the nation’s economy grew more than forecast in July and wages rose at the fastest pace since 2009. The currency gained 1.2 percent to 586.40 per dollar.

Canada’s dollar weakened against most major counterparts after employment unexpectedly declined by 11,000 jobs in August. The currency slipped as much as 0.3 percent against the U.S. dollar to C$1.0903.

Sterling had the biggest weekly loss in more than a year before a vote on Scottish independence on Sept. 18. A win for nationalists seeking to leave the U.K. may prompt a pound selloff, Goldman Sachs Group Inc. said this week. The currency dropped 1.6 percent from Aug. 29 to $1.6327. It was little changed on the day.

The euro fell yesterday when the ECB unexpectedly cut its main refinancing rate to a record and introduced additional stimulus. ECB President Mario Draghi is trying to stave off deflation as the euro region’s economy slumps.

Draghi pledged to “significantly steer” the central bank’s balance sheet back toward the 2.7 trillion euros ($3.5 billion) of early 2012 from 2 trillion euros. He announced a plan to buy securitized debt and covered bonds.

Net Shorts

Hedge funds and other large speculators increased bets on a decline in the euro against the dollar to the most since July 2012. The difference in the number of wagers on a drop compared with those on a gain -- so-called net shorts -- was 161,423 on Sept. 2, from 150,657 a week earlier, according to data from the Washington-based Commodity Futures Trading Commission.

The yen slid yesterday after the Bank of Japan kept its monetary stimulus unchanged. Japanese policy makers maintained their pledge to increase the monetary base at an annual pace of 60 trillion yen ($570 billion) to 70 trillion yen

Japan’s currency fell 1 percent in the past month in a basket of 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The euro dropped 1.9 percent, the worst performer after the pound, while the dollar strengthened 1.7 percent.

Lower Participation

U.S. payrolls growth was weaker than the lowest estimate in a Bloomberg survey and followed a revised 212,000-job gain in July, Labor Department figures showed in Washington. The labor-force participation rate, the share of Americans employed or looking for work, slipped to 62.8 percent in August from 62.9 percent a month earlier.

The unemployment rate fell to 6.1 percent from 6.2 percent in July, reflecting a drop in joblessness among teenagers.

Fed policy makers led by Chair Janet Yellen raised the possibility at a meeting in July that they might increase the benchmark interest-rate target sooner than they anticipated if labor-market gains quicken, according to minutes released on Aug. 20. The U.S. central bank meets Sept. 16-17.

The employment report “will probably come up for conversation at the next Fed meeting, but I can’t see this changing Yellen’s view in any way,” Douglas Borthwick, the head of foreign exchange at New York brokerage Chapdelaine & Co., said by phone. “The Fed continues to have this thought that they’ll be raising rates sooner than other countries.”

Interest Rates

The dollar index, which tracks the greenback against 10 major counterparts, has rallied 3.5 percent this quarter as the Fed considers when to raise interest rates for the first time since 2006. The rate has been held in a range of zero to 0.25 percent since December 2008 to support the economy.

Futures trading showed a 52 percent likelihood of an increase to at least 0.5 percent by July 2015, versus a 56 percent chance yesterday.

“Things continue to be worse abroad -- in the euro zone, in Japan, in China, in much of the industrialized world,” Omer Esiner, chief market analyst at currency brokerage Commonwealth Foreign Exchange Inc. in Washington, said in a phone interview. “The U.S. appears to be the strongest of that group, and as such I think the dollar should continue longer-term to appreciate.”

To contact the reporter on this story: Rachel Evans in New York at revans43@bloomberg.net

To contact the editors responsible for this story: Dave Liedtka at dliedtka@bloomberg.net Greg Storey

Islamabad News | Islamabad Clashes

Three killed, over 560 injured in Islamabad clashes

ISLAMABAD: The federal capital remains tense after violence broke out on Saturday night when supporters of Pakistan Tehreek-e-Insaf (PTI) chairman Imran Khan and Pakistan Awami Tehreek (PAT) chief Dr Tahirul Qadri tried to storm PM House using crane’s to remove barricades.

Clashes between police and protesters in which three people were killed and over 560 injured continued on Sunday. 77 of those injured were security officials deployed in the Red Zone.

Protesters several of whom were armed with batons and slingshots started removing containers used as barricades which lead to the police using tear gas to force the crowds back. Authorities said they had no choice but to use force.

Shipping containers were set ablaze, several vehicles stood torched, and hundreds of tear gas canisters lay strewn on the ground on Islamabad's normally pristine Constitution Avenue. Protesters also attacked the Geo News office in Islamabad and a satellite van of the channel.

Scores of protesters carrying hammers and iron rods also broke down a fence outside of parliament late Saturday, enabling hundreds of people to enter the lawns and parking area. Acting IGP Islamabad Khalid Khattak said the protesters were armed with large hammers, wire cutters, axes and even a crane.

Police also beat local journalists covering the protests with batons, injuring some, Railways Minister Khawaja Saad Rafiq said. Rafique said he intervened to stop the police assault and he would ask the government to investigate the officers' conduct.

Who is responsible for the violence in Islamabad

Imran Khan/Dr. Tahir-ul Qadri

Nawaz Sharif/Chaudhry Nisar

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Protests began with a march from Lahore on August 14 and reached Islamabad the next day. Despite calls by Khan and Qadri for millions to join, crowds never exceeding the tens of thousands. Both Khan and Qadri stayed overnight at the protests, spending most of their time in the containers.

 

The decision to march to the PM House was taken after talks between the government, PTI and PAT failed to end the deadlock over the resignation of Prime Minister Nawaz Sharif. PTI chairman Imran Khan has said that an independent probe of rigging in the 2013 general elections cannot be held if Nawaz Sharif remains prime minister. Khan has called for Nawaz Sharif to step down until the proposed judicial commission completes its probe. Government and the majority of opposition parties have dismissed Khan’s demand for the prime minister’s removal.

Joint session of Parliament on Tuesday
 

Prime Minister Nawaz Sharif chaired a high-level meeting on Sunday during which it was decided that a joint session of Parliament would held on Tuesday. According to sources the meeting also took the decision to re-engage the PTI and PAT in talks.

 

Differences emerge in PTI

Following clashes in Islamabad, differences have emerged within the PTI. The party’s elected president Javed Hashmi said Imran Khan’s decision to march to the PM House was not that of the party’s. He claimed Imran had been prompted to take this decision after receiving a message from Sheikh Rasheed and Saifullah Niazi. Hashmi said Imran Khan would be to blame if democracy was derailed.

In response to Hashmi, Khan dismissed the elected PTI president announcing that ‘from today he had parted ways with him.’ The PTI chairman also announced that three party MNAs who had not submitted their resignations had also been expelled.

 

Army stresses political resolution to crisis

The Corps Commanders conference chaired by Chief of Army Staff (COAS) General Raheel Sharif ended with the decision that “further use of force will only aggravate the problem”. The conference was originally planned to take place on Monday but due to the security situation in the Capital and the unrest in the country the meeting was held on Sunday.

 

According to a press release from the Inter Services Public Relations (ISPR) wing of the Pakistan Army, the conference “reviewed with serious concern, the existing political crisis and the violent turn it has taken, resulting in large scale injuries and loss of lives.” The meeting once again reiterated that the “situation should be resolved politically without wasting any time and without recourse to violent means.”

The ISPR statement ended on the note that the “army remains committed to playing its part in ensuring security of the state and will never fall short of meeting national aspirations.”