NFP's Disappoint As ECB Stays Put On Rates - Low Volumes Today For 4th July Holiday

Market Brief

NFP's disappoint by showing a -467K decline in payrolls, 100K more than the consensus. This underlines the vast layoffs from the GM and Chrysler debacle and the continuing difficulty to revive the economy. The EURUSD dropped from it's high 1.41's as low as 1.3930 before rebounding. While the pair broke it's range momentarily only a healthy breakout below the 1.3900 support will prove sufficient for a substantial move.

The ECB kept rates at 1.00% followed by an uninspiring press conference by Trichet. No comments on whether the rates would fall further but it was clear that no hikes would come before 2010.

Volumes will inevitably be low today as the U.S is off for a pre-4th July holiday. We expect currencies to stay in tight ranges but large funds, sovereign or private entering the markets could provide large moves.

ACM FOREX

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