Greenback declines against the Yen as U.S payrolls fall

The dollar headed for a decline against the yen, its longest losing streak in four years, before a U.S. government report that economists say will show the unemployment rate rose to the highest level since 1993. The greenback was also poised for a second weekly loss versus the euro on speculation the jobs report will give the Federal Reserve more reason to cut interest rates. “The market is moving to a broadly weak trend for the dollar,” said Hideki Amikura, deputy general manager of foreign exchange in Tokyo at Nomura Trust and Banking Co., a unit of Japan’s largest brokerage. “Non-farm payrolls numbers are likely to be ugly. This should pressure the dollar to trade lower.” The USD/JPY is currently trading at 92.25 as of 10:17am, GMT.

The Bank of England’s third interest- rate cut since the start of October is raising speculation that the pound’s 26 percent slide may be coming to an end. Bank of England Governor Mervyn King cut the nation’s key rate to 2 percent yesterday, the lowest level since Winston Churchill was prime minister in 1951, to help bolster an economy on the brink of a recession. The rate is down from 5 percent as recently as Oct. 7. “If you were shorting the pound, now is the time to reduce those positions,” said Myles Bradshaw, a money manager in London at Pimco, manager of the world’s largest bond fund. “The arguments to be underweight are not as strong anymore.” The GBP/USD is currently trading at $1.4670 as of 10:22am, GMT.

The Australian and New Zealand dollars declined this week as investors sold higher-yielding assets before a report forecast to show unemployment in the U.S. rose to the highest since 1993. “There is no shortage of ammunition for an extended recession, the balance is overwhelmingly on that side of the equation,” said Alex Sinton, a senior currency dealer at ANZ National Bank Ltd. in Auckland. The Australian and New Zealand dollars are “still under pressure” and could slump toward 63.50 and 52.50 U.S. cents respectively today, he said. The AUD/USD is currently trading at 0.6444 as of 10:30am, GMT.

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