The dollar lost most of its weekly gains on the back of the press conference and the pound fell against the Euro as well.
Well well, so much for the economies crying out for a rate cut Mr Trichet! We suspect the market will continue to monitor food costs and energy prices ever more so now and the dollar has now come under renewed pressure, loosing any relief Bernanke's hawkish tone had on the greenback.
Today we are holding out for non farm payrolls in the US and it is widely anticipated that the US's performance could be summed up on the back of today's numbers. Over the past 3 decades, the US economy has gone through 3 recessions, according to NBER.
In each of those 3 recessions, there was a string of job losses that lasted for a minimum of 10 months. Thus far, non-farm payrolls have fallen negative for the past 4 months, and the May report is anticipated to bring this tally up to 5. Some argue that the current downturn in growth could be more severe than the recession in the early 2000s due to the triple blow of a housing crisis, credit crunch and skyrocketing commodity prices.
As if this weren't enough, the odds are in favor of more severe job losses in coming months because in each of the past 3 recessions, the largest single month job loss was more than 300k! In this context, a 100k drop over the next few months is not only possible, but probable.