NEW YORK: The U.S. dollar slid to a 15-year low versus the yen on Friday, Oct 8 after a weak U.S. jobs report while Wall Street stocks rose to 5-1/2 month highs on speculation the data will push the Federal Reserve to launch another round of economic stimulus.
Currency tops the agenda in Washington where finance ministers and central bankers are attending the International Monetary Fund and World Bank weekend meeting and are expected to seek avoidance of a full-blown currency war.
The U.S. Labor Department reported on Friday a modest increase in private sector employment, but an overall loss of 95,000 jobs.
In the report's wake, short-term U.S. government debt prices rose modestly while longer-dated issues slipped from earlier highs as the prospect of easier Fed monetary policy made riskier assets like stocks more alluring.
"It was almost as if the market was cheering for a bad report to try to solidify that the Fed would engage in quantitative easing," said Scott Marcouiller, chief technical market strategist at Wells Fargo Advisors in St. Louis
Investors, however, find themselves caught in the cross-fire as policymakers work to soothe trade tensions and avoid scuttling a nascent global economic recovery with protectionist trade measures.
The weaker greenback spurred spot gold to a fourth consecutive week of gains. Gold rose but not enough to match Thursday's record $1,364.60 per ounce. Oil prices also rose.
The Dow closed above the 11,000 mark for the first time in five months. The blue chip average rose 57.90 points, or 0.53 percent, at 11,006.48. The Standard & Poor's 500 Index gained 7.09 points, or 0.61 percent, at 1,165.15. The Nasdaq Composite Index climbed 18.24 points, or 0.77 percent, at 2,401.91.
Shares of aluminum producer Alcoa Inc rose 5.65 percent to $12.89 after reporting quarterly profit above analysts' forecast late Thursday and saying global markets were strengthening.
Freeport-McMoRan Copper & Gold Inc gained 4.4 percent to $95.51, while the S&P Materials index shot up 2.02 percent.
Mining stocks helped lift European shares to close the week on a positive note. The FTSEurofirst 300 index of top European shares just managed a 0.01 percent rise to 1,070.67.
Heavyweight miners such as Rio Tinto and BHP Billiton climbed 1.9-2.0 percent, rising along with commodity prices on expectations that the Fed will pump more money into the system.
Banking stocks, however, resumed their four-week pullback, with Barclays losing 2.3 percent after a key investor cut his stake in the bank.
MSCI's All-Country World index was 0.22 percent higher while the Thomson Reuters global stock index rose 1.04 percent.
Japan's Nikkei stock index fell 0.99 percent.
CURRENCY COUNTDOWN
The start of the Washington meetings has been dominated by the policymakers talking about how to avoid a knock-down trade protectionist brawl.
At the heart of the matter is long hoped-for global economic rebalancing and the ugly underside of 'beggar-thy-neighbor' tactics governments can employ to protect their export economies by keeping their currencies weak.
Japan, whose export-led but stagnant economy, has said it will continue to intervene to curb a strong yen if necessary. China has rebuffed calls from the West to let its currency rise faster but allowed it to firm on Friday to its highest against the dollar since a revaluation in July 2005.
The U.S. dollar fell 0.56 percent to 81.87 yen, hovering just above the 15-year low of 81.71.
Jean-Claude Juncker, the chairman of euro zone finance ministers, said the euro exchange rate against the dollar was too strong at $1.4000 as the dollar did not reflect U.S. economic fundamentals. That prompted the euro to erase gains against the dollar to trade flat at $1.3931.
"Juncker has turned the market with comments about how he's not happy with the euro reaching $1.40,' said Michael Woolfolk, senior currency strategist at BNY Mellon in New York.
"This adds to concern about competitive devaluations, particularly since foreign exchange will be discussed at official IMF meetings this weekend."
Concerns that a stronger euro may weigh on the pace of Europe's economic recovery, meanwhile, were fueled by German exports falling in August for the second consecutive month and narrowing the trade balance.
Bund futures pared losses after Friday's U.S. payrolls report, rising to 131.82 from 131.64 on Thursday.
Benchmark 10-year U.S. Treasuries yielded 2.39 percent in late trade on Friday, unchanged from late Thursday. The U.S. bond market will be closed on Monday for Columbus Day.
Spot gold prices rose $13.60 to $1,346.30, while crude oil settled up 99 cents to $82.66 per barrel.
U.S. agricultural futures, including corn, soybean and wheat, rose sharply in Chicago after the government estimated this year's harvest below expectations and forecast tight supply
Currency tops the agenda in Washington where finance ministers and central bankers are attending the International Monetary Fund and World Bank weekend meeting and are expected to seek avoidance of a full-blown currency war.
The U.S. Labor Department reported on Friday a modest increase in private sector employment, but an overall loss of 95,000 jobs.
In the report's wake, short-term U.S. government debt prices rose modestly while longer-dated issues slipped from earlier highs as the prospect of easier Fed monetary policy made riskier assets like stocks more alluring.
"It was almost as if the market was cheering for a bad report to try to solidify that the Fed would engage in quantitative easing," said Scott Marcouiller, chief technical market strategist at Wells Fargo Advisors in St. Louis
Investors, however, find themselves caught in the cross-fire as policymakers work to soothe trade tensions and avoid scuttling a nascent global economic recovery with protectionist trade measures.
The weaker greenback spurred spot gold to a fourth consecutive week of gains. Gold rose but not enough to match Thursday's record $1,364.60 per ounce. Oil prices also rose.
The Dow closed above the 11,000 mark for the first time in five months. The blue chip average rose 57.90 points, or 0.53 percent, at 11,006.48. The Standard & Poor's 500 Index gained 7.09 points, or 0.61 percent, at 1,165.15. The Nasdaq Composite Index climbed 18.24 points, or 0.77 percent, at 2,401.91.
Shares of aluminum producer Alcoa Inc rose 5.65 percent to $12.89 after reporting quarterly profit above analysts' forecast late Thursday and saying global markets were strengthening.
Freeport-McMoRan Copper & Gold Inc gained 4.4 percent to $95.51, while the S&P Materials index shot up 2.02 percent.
Mining stocks helped lift European shares to close the week on a positive note. The FTSEurofirst 300 index of top European shares just managed a 0.01 percent rise to 1,070.67.
Heavyweight miners such as Rio Tinto and BHP Billiton climbed 1.9-2.0 percent, rising along with commodity prices on expectations that the Fed will pump more money into the system.
Banking stocks, however, resumed their four-week pullback, with Barclays losing 2.3 percent after a key investor cut his stake in the bank.
MSCI's All-Country World index was 0.22 percent higher while the Thomson Reuters global stock index rose 1.04 percent.
Japan's Nikkei stock index fell 0.99 percent.
CURRENCY COUNTDOWN
The start of the Washington meetings has been dominated by the policymakers talking about how to avoid a knock-down trade protectionist brawl.
At the heart of the matter is long hoped-for global economic rebalancing and the ugly underside of 'beggar-thy-neighbor' tactics governments can employ to protect their export economies by keeping their currencies weak.
Japan, whose export-led but stagnant economy, has said it will continue to intervene to curb a strong yen if necessary. China has rebuffed calls from the West to let its currency rise faster but allowed it to firm on Friday to its highest against the dollar since a revaluation in July 2005.
The U.S. dollar fell 0.56 percent to 81.87 yen, hovering just above the 15-year low of 81.71.
Jean-Claude Juncker, the chairman of euro zone finance ministers, said the euro exchange rate against the dollar was too strong at $1.4000 as the dollar did not reflect U.S. economic fundamentals. That prompted the euro to erase gains against the dollar to trade flat at $1.3931.
"Juncker has turned the market with comments about how he's not happy with the euro reaching $1.40,' said Michael Woolfolk, senior currency strategist at BNY Mellon in New York.
"This adds to concern about competitive devaluations, particularly since foreign exchange will be discussed at official IMF meetings this weekend."
Concerns that a stronger euro may weigh on the pace of Europe's economic recovery, meanwhile, were fueled by German exports falling in August for the second consecutive month and narrowing the trade balance.
Bund futures pared losses after Friday's U.S. payrolls report, rising to 131.82 from 131.64 on Thursday.
Benchmark 10-year U.S. Treasuries yielded 2.39 percent in late trade on Friday, unchanged from late Thursday. The U.S. bond market will be closed on Monday for Columbus Day.
Spot gold prices rose $13.60 to $1,346.30, while crude oil settled up 99 cents to $82.66 per barrel.
U.S. agricultural futures, including corn, soybean and wheat, rose sharply in Chicago after the government estimated this year's harvest below expectations and forecast tight supply
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