US Non Farm Payroll Report
On Friday the US non farm payroll report was not as bad as expected and triggered a return to risk appetite. The US dollar rose against the Japanese Yen but remained little changed vs. the Euro. Forex traders noted that previously the dollar had fallen due to a smaller than expected rate cut by the European Central Bank.
US Loses 663,000 Jobs in March
Data in the US report showed that 663,000 jobs were lost in March and the unemployment rate was 8.5%, a 25 year high. Matt Esteve of Tempus Consulting stated, “It’s a pretty awful number but it was almost to be expected. There seems to be no bottom in the U.S. job markets yet, but other recent economic indicators have been better than expected.” The Dollar rose above 100 Yen and many forex traders noted the dire condition of the Japanese economy.
Dollar and Yen Under Pressure
In recent global forex trading both the US dollar and the Yen have been under pressure as forex traders and investors sought the opportunities offered by higher yielding currencies. Recent gains in stock markets eroded the safe haven appeal of the dollar and Yen. Online forex traders reported an increase in activity as investors switched forex strategies.
Dollar Up Against Yen
The dollar rose 0.8% against the Yen reaching a five month high against the Yen. Risk sentiment rose among forex traders after the G 20 summit in London. The US announced new accounting regulations designed to help troubled banks which helped to heighten risk sentiment among forex traders and investors.
Risk Appetite Higher
The rise in stock markets has also helped to boost risk sentiment among forex traders. Some economists and forex traders believe the world economy has bottomed out and see signs of recovery. Others are not so sure. Vassili Serebriakov of Wells Fargo stated, “There had been a degree of enthusiasm that perhaps the world economy has seen the worst, and the jobs data tempered that enthusiasm a bit.”
Traditionally any rise in risk sentiment creates forex opportunities for traders. Hopefully this trend will continue.
