The US dollar gained across the board on news that the U.S. economy shed only 345,000 jobs in May, the least in eight months, aiding hopes of an economic recovery. April job loss was revised down to 504,000 from 539,000. The jobless rate rose to 9.4 percent in May from 8.9 percent in April. The upbeat US jobs data weakened the Japanese yen on speculation investors would increase demand for higher-yielding assets funded in the Japanese currency.
The euro fell more than 1 percent against the US dollar to a new session low as investors sold the euro on concern that the euro appreciated too fast. Yesterday, the European Central Bank left interest rates steady, and indicated that the euro zone would have negative growth this year, but will recover in 2010. Meanwhile, its labor market would deteriorate further in the coming months.
The Sterling fell to its lowest level this month and was hurt by ongoing UK political turmoil. Prime Minister Gordon Brown reshuffled his cabinet and was asked to resign. Pensions Secretary James Purnell also stepped down while Defense Minister John Hutton also quit. Despite political uncertainty, sterling losses were cut as upbeat US jobs data spurred speculation that demand for Britain’s assets will rise.
The Canadian dollar gains evaporated from near an eight-month high after the economy lost a net 41,800 jobs in May after an increase of 35,900 in April. The jobless rates rose to 8.4 percent. Meanwhile, crude oil prices rose above $70 a barrel, hitting a new seven-month high.
Meanwhile, the Australian and NewZealand dollar rose as risk appetite returned on hope that the global recession is tapering off. Interest rates are 3 percent in Australia and 2.5 percent in New Zealand, compared with 0.1 percent in Japan.
And New Zealand dollar rose as risk appetite returned on hope that the global recession is tapering off. Interest rates are 3 percent in Australia and 2.5 percent in New Zealand, compared with 0.1 percent in Japan.
