Dollar Bounces Off Lows

By John Lee

U.S. 10-year Treasury bond prices fell today, on positive sentiment from new records in the U.S. equities market, and a decrease in initial jobless claims. Bond prices usually move down on economic strength and up on weakness; earlier this week, traders bought bonds on a weak housing report and falling consumer confidence. Today's move lower puts bond prices a little lower than where they were before the spike early in the week.

The yen plummeted today against the dollar and the euro, falling to new record lows against the European currency. The dollar also rose against the euro, on strength from a positive unemployment report from early in the day. Fewer initial jobless claims were filed last week in the U.S., but total jobless numbers could point to some weakness in growth. Accelerating business costs and housing sector fears could lead to staff reductions across the country, leading some investors to fear that next week's employment reports could evidence weakness. Despite the soft aspects of the report, the dollar rallied on the news. The euro has been breaking new records against the yen for weeks now, but the dollar managed to stave off euro strength, on positive sentiment from the morning U.S. unemployment report.

Crude oil futures slid ABOUT 1% today, on reports progress in nuclear talks between Iran and the EU. Iran has been a major concern for oil traders, and any geopolitical tension with the country has led to prices spikes recently. Both the latest UK/Iran situation and the rally to record prices this summer illustrate crude's sensitivity to Middle East tensions. Crude has been trading in a 10-point range for about a month now. natural gas futures fell over 2% today on warm weather across the country.

Gold futures fell about 1.5%, the most in 8 weeks, as the dollar strengthened of major lows against the euro. Gold usually trades inversely to the dollar and with oil, and it was today's dollar strength that dominated gold trading. Traders sold gold to buy the dollar, which sent the precious metal lower. Copper fell nearly 3% on slowing U.S. housing growth.
Grains traded mixed today. Soybeans fell about 0.4%, corn fell around 1.4% and wheat gained fractionally.

Economic News
Initial unemployment claims fell by about 20k last month.