In the currency market, the dollar was lower against the euro. Late Thursday, the euro was trading at $1.2818 vs. $1.2783 on Wednesday.
The story of the day in the currency market was the crash of the Swiss franc, which fell at least 3% against the euro, pound, and USD. As Dan Norcini wrote on jsmineset.com, “The big stunner of [yesterday] was massive intervention by the Swiss National Bank into the Forex markets which absolutely obliterated the Franc. They caught everyone flatfooted and achieved maximum shock value.
“The Swiss cut their 3 month Libor target by 25 basis points but they also stepped into the bond market and purchased substantial amounts of Swiss franc bonds. That in combination with them buying large amounts of foreign currency is in my view what shoved gold up so sharply today. The strategy of the Swiss is pretty clear – undercut their own currency to remain export competitive especially against the Euro and the US Dollar and provide substantial amounts of liquidity in the process.”
Among the day’s hard data, the Commerce Department said that retail sales dropped 0.1% on a seasonally adjusted basis in February. Hardly something to crow about, but it was a whole lot better than the 0.4% decline expected by economists. January's sales gain was revised up, to a 1.8% growth rate from the 1% increase estimated.
“How about that!” exclaimed economist Jennifer Lee of BMO Capital Markets. But she added that, “Consumers are fighting a good fight, but with such a terrible job market, it is tough to imagine how they can keep it going for long.”
Her skepticism is surely well-founded. The Labor Department reported yesterday that first-time applications for unemployment benefits rose by 9,000 last week to 654,000, up 88% from a year earlier. The number of people collecting jobless benefits also increased, up 193,000 to a record 5.32 million, Labor said.
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