The US dollar fell against most major currencies, following discouraging employment data released by the Labor Department. Non-farm payrolls fell 131,000 as temporary census jobs wind down. Private US employers added a lesser than expected 71,000 jobs vs. the forecasted 90,000. Meanwhile, the government's revised payrolls for May and June showed 97,000 fewer jobs than previously reported. The market is looking ahead to next Tuesday for further comments on the employment front from the central bank.

The euro rose against the dollar and peaked to its highest in three months, following weak US employment report. European Central Bank President Jean-Claude Trichet said the money markets are improving and recovering faster than forecasted, making it possible for the eventual liberation of liquidity tools used to attack the financial crisis.

The British pound rose to its highest in six months against the dollar as investors respond to the weaker-than-expected US non-farm payrolls data. Domestically however, the Office for National Statistics showed UK's industrial production, which accounts for 17% of the economy, had declined 0.5% in June from the previous month.

The Canadian dollar fell against the US dollar following reports that Canada's economy shed 9,300 jobs in July in comparison to the forecasted 15,000 gain. According to Statistics Canada, full-time employment plummeted while a surge in part-time jobs made gains. Meanwhile, Canada's unemployment rate rose to 8.0%, an increase from the 7.9% from the previous month of June.

The Japanese yen trumped against the dollar, hitting a near 15-year high, following US employment report. Discouraging data from abroad encouraged a flight to safety into the yen. Domestically however, major exporters like automakers and electronic makers worry the rise in the yen will shed demand and cut into profits due to their products becoming more expensive overseas.

The Australian and New Zealand dollars slipped against the US dollar as investors took cautionary measures against uncertainty over the global economy. The Reserve Bank of Australia said core inflation will average 2.75% until the end of next year and expansion is unlikely to fuel inflation for the next two years following weaker household and government spending.

 

Indications of Overnight rates:

EUR/USD

1.3301

USD/JPY

85.01

GBP/USD

1.5990

USD/CAD

1.0266

USD/MXN

12.7121

USD/CHF

1.0331

AUD/USD

0.9174

NZD/USD

0.7320

10-Year Treasury Note Yield: 2.934%

Dow Jones Industrial Average: 10528.08 -1.38%