European Stocks Drop Before US Jobs

European stocks drop before US jobs

LONDON, Jan 6, (Pakistan Point News - APP - 06th Jan, 2017 ) - European stock markets fell Friday awaiting key US jobs data, while Dollar weakness saw China raise its exchange rate against the US Currency by a decade-high leap. Around 1115 GMT, London's benchmark FTSE 100 index was down 0.1 percent having hit multiple record highs this week as a weaker pound lifted shares of multi-nationals listed on the index. In the eurozone, Frankfurt's DAX 30 index shed 0.

2 percent and the Paris CAC 40 dropped 0.5 percent compared with Thursday's closing levels. "As we look ahead to this... release (Friday) of the December data on the US labour market, there has been some recent evidence to suggest that we could be in store for a disappointment in what is arguably the biggest economic release of them all," said David Cheetham, market analyst at XTB trading group. Ahead of the Labor Department's monthly jobs report, data Thursday from the ADP payrolls firm showed that private US companies added 153,000 jobs in November, slightly below market expectations.

Analysts expect the Labor Department report to show the US economy added 175,000 jobs in December and unemployment at 4.7 percent. Thursday's jobs figures weighed on the dollar, while the currency may suffer further losses over coming days. "Yesterday's sell off in the US dollar may well herald the beginnings of a corrective move lower, particularly given the suddenness of the move against the Chinese Yuan and Japanese Yen," said Michael Hewson, chief market analyst at CMC Markets UK.

China on Friday hiked the yuan against the dollar in its biggest one-day increase since 2005. The People's Bank of China, which has been battling to shore up the sagging yuan, fixed it at 6.8668 to the dollar, according to the country's foreign exchange market operator. The 0.92 percent hike was the strongest daily increase since July 2005, and comes after the yuan recently flirted with the 7.0 to the dollar mark, a threshold not crossed in more than eight years.

China's currency has been under pressure from uncertainty over the health of the world's second largest economy, massive capital outflows and the sharp rise in the dollar following Donald Trump's election victory and anticipation of US interest rate hikes. Beijing allows the tightly controlled yuan to rise or fall only two percent on either side of the daily fix, to prevent volatility and maintain control over the currency. China said last week it would almost double the number of foreign currencies it uses to determine the official value of the yuan, thereby diluting the role of the dollar as authorities seek to arrest the yuan's fall and project an image of stability in the unit.

- Key figures around 1115 GMT - London - FTSE 100: DOWN 0.1 percent at 7,190.65 points Frankfurt - DAX 30: DOWN 0.2 percent at 11,559.17 Paris - CAC 40: DOWN 0.5 percent at 4,876.92 EURO STOXX 50: DOWN 0.5 percent at 3,301.34 Tokyo - Nikkei 225: DOWN 0.3 percent at 19,454.33 (close) Shanghai - Composite: DOWN 0.4 percent at 3,154.32 (close) Hong Kong - Hang Seng: UP 0.2 percent at at 22,503.01 (close) New York - Dow: DOWN 0.2 percent at 19,899.29 (close) Euro/dollar: DOWN at $1.0592 from $1.0609 Pound/dollar: DOWN at $1.2381 from $1.2421 Dollar/yen: DOWN at 115.30 from 116.00 Oil - West Texas Intermediate: UP 45 cents at $54.21 per barrel Oil - Brent North Sea: UP 50 cents at $57.39