The New Zealand dollar fell to one-week lows against the dollar

The US dollar was higher vs. most major currencies as weak global data bolstered risk aversion. Domestic data showed that US employers cut 467,000 jobs in June, more than forecasts of 363,000. The unemployment rate rose to 9.5% as the labor market continues to struggle with the deep recession. Positive data showed that factory orders were up 1.2% and durable good were up 1.1%.

The euro fell against the dollar as investors fled to safe-haven currencies following data showing Euro Zone economic weakness. Data showed that Euro Zone unemployment hit 9.5% in May, bolstering market expectations the European Central Bank will leave interest rates at a record low 1%. The European Commission expects unemployment in the Euro Zone to rise to 9.9% this year and to 11.5% in 2010 and the economy to recover in mid 2010. Producer prices fell 0.2% month-on-month, vs. forecasts of a 0.1% rise.

The British pound was lower against the dollar after dovish comments from a Bank of England policymaker and continued concerns about the economy. BoE policymaker Tim Besley said it was too early to judge when the central bank will need to start withdrawing the massive stimulus it has delivered. Data showed that an index on purchasing managers’ survey on UK construction activity fell to 44.5 in June.

The Japanese yen rose against the dollar as weak employment data in the US boosted the currency.

The Canadian dollar fell against the dollar as crude oil prices fell more than $2 a barrel. Canada is a major exporter of crude oil.

The Australian dollar weakened against the dollar following the release of weak domestic data. The trade deficit widened to AUD556 million in May, more than forecasts of AUD125 million. Lower commodity prices also hurt the commodity-linked currency. Analysts expect that Australian interest rates are not likely to rise anytime soon.

The New Zealand dollar fell to one-week lows against the dollar, weighed down by lower prices for the country’s key dairy exports. Fonterra, New Zealand’s biggest company generating more than 7% of its GDP, said dairy prices were down 12% in June. Investors were also concerned about some NZD4.5 billion in maturing domestic bonds this month. The kiwi is vulnerable if investors decide to repatriate their investments rather than re-invest in kiwi assets.