Yesterday we could notice that the U.S. dollar was down against most of the other major currencies. The continuing trend of the depreciation of the US doll still seems to be very strong and as is forecasted by many traders, this move should go much further. The US market sufferd yesterday from additional turbulences in its economy, after the publication of very important indexes which easily influence the US economy and its currency, indexes such as: Personal Spending, Personal Income, Unemployment Claims, and Manufacturing Index. The Institute for Supply Management’s factory index chopped down to 50.9 in October, the lowest in seven months since March, from 52 in September and less than economists anticipated. This result of the manufacturing sector in October suggested that continuing troubles in the housing and credit markets have seeped into the industrial sector. The imports index fell below 50 for the first time in nearly six years, suggesting that manufacturers have begun to resource supplies domestically rather than in foreign countries. The Labor Department announced yesterday that the number of people asking for unemployment benefits declined by a larger-than-expected 6,000 last week to total 327,000. Initial jobless claims fell by 6,000 to 327,000 in the week that ended Oct. 27, surpassing this year’s standard of 318,000 for three consecutive weeks. This result implies a slowdown in hiring.
The spending report showed incomes increased 0.4 percent in September for a second month. With the market growing pessimistic about the economy, as it seems, The Fed’s decision to cut interest rates probably won’t do much for banks struggling with rising credit losses as we can notice step by step how it begins to influence the diverse segments of the economy. Today, the Labor Department is going to publish the reports on October jobs creation (Nonfarm Employment change, and Unemployment rate); this time these reports will have more importance than they usually have on the US economy trend. The report should show slower job creation, strengthening the Fed’s motivation for further interest-rate cuts.
