The US dollar strengthened against most major currencies following the decline in US jobless claims while private employers added more jobs. The Labor Department reported a drop in unemployment claims of 10,000 to a seasonally adjusted 453,000. Meanwhile, ADP Employer Services reported an increase to payrolls to 55,000 jobs in May, indicating expansion in the labor market. Today's data shows firm signs of stabilization in the labor market. Look forward to Friday's employment report which is expected an increase for May.

The euro fell back against the dollar and across most major currencies as investors push towards the safety of the greenback showing today's optimistic labor data.

The sterling moved higher against. the dollar following reports showing an increase in UK home prices and a surge in demand for higher risk currencies. Data from Nationwide showed home prices in Britain rose by 0.5% in May. Additionally, the pound rose against the dollar and the low-yielding yen as the appetite for risk increased with the optimism over an improving global economy.

The Japanese yen fell against the dollar followed by political uncertainty in Japan and the increasing appeal for riskier currencies. Political instability looms over Japan as Prime Minister Yukio Hatoyama resigned yesterday. Additionally, increasing demand for higher risk currencies such as the Australian dollar had a negative impact on the demand for the low-yielding yen.

The Canadian dollar showed continued gains vs. the US dollar as crude oil prices rose. Crude oil is a key Canadian export and was up 0.7% to $73.47 a barrel. Look forward to Friday's Canadian employment data to further gage the direction the loonie.

The Australian and New Zealand dollars climbed higher as the Aussie saw unexpected trade surplus. Australian data reported its first trade surplus in 13 months by higher export earnings. Markets await Australia's non-farm payrolls data this Friday.

 

Indicative rates:

EUR/USD

1.2205

USD/JPY

92.10

GBP/USD

1.4641

USD/CAD

1.0401

USD/MXN

12.8265

USD/CHF

1.1590

AUD/USD

0.8350

NZD/USD

0.6775

10-Year Treasury Note Yield: 3.357%

Dow Jones Industrial Average: 10,206.46 - 0.42%