The US dollar fell against the yen and eased previous gains versus the euro and pound in early morning trading, after the data release of the US non-farm payroll totals and the US unemployment rate. The Labor Department reported an increase in non-farm payrolls of 431,000 in May vs. 290,000 in April, however much lower than the expected 513,000. In addition, US jobless rate dropped to 9.7% in May from 9.9% in April. The dollar's early morning losses have been erased against the euro and the pound due to concerns over Europe's debt crisis expanding to Hungary. The dollar is near 4 year highs against the euro.
The euro dropped vs. the dollar and weakened across the board after comments by French Prime Minister Francois Fillon who said that he saw only good news in the parity between USD and EUR. The euro broke to its weakest vs. the dollar in more than 4 years, lowest vs. the pound since December 2008, and hit a lifetime low vs. the Swiss franc. Concerns about public finances in Hungary weighed on the euro.
The sterling fell from earlier gains against the dollar after release of the US employment data. Additionally, analysts are anticipating the British government to announce a budget plan later this month that will help reduce the immense deficit of more than 11% GDP.
The Japanese yen moved higher against the dollar and across most currencies after the release of a weaker than expected US jobs report. Meanwhile, Finance Minister Naoto Kan replaced Yukio Hatoyama as Japan's new prime minister. Naoto Kan, a fiscal conservative, has been known to challenge the status quo and to prefer a weaker yen.
The Canadian dollar weakened against the US dollar following new concerns about global growth and the outlook for the eurozone. Even while Canadian employment numbers came in stronger than expected, weaker than expected US employment figures brought investors less optimism and more caution to their views towards the recovery in Europe as well as the global economy.
The Australian dollars turned away from previous highs as investors became risk averse subsequent to US employment numbers. For the New Zealand dollar, analysts are expecting that the Reserve Bank of New Zealand will increase its rates from their record low of 2.5% at next Thursdays monetary statement. The predicted rate increase may be the kiwi's first movement of the year.
The Mexican peso fell against the dollar as fewer US jobs were added last month. The peso gained 1.6% against the dollar for the year as the best performer among the 16 major currencies. For the week, the peso has risen 0.7%.
10-Year Treasury Note Yield: 3.219%
Dow Jones Industrial Average: 10,025.91 - 2.25%