Reuters: US Dollar Report: FOREX-Dollar falls against the yen after US jobs data

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FOREX-Dollar falls against the yen after US jobs data May 4th 2012, 15:08 Fri May 4, 2012 11:08am EDT * U.S. economy adds 115,000 jobs in April, below forecast * Yen soars on safe-haven flows, Aussie tumbles * Weak data, weekend elections keep euro vulnerable By Wanfeng Zhou NEW YORK, May 4 (Reuters) - The dollar slipped against the yen in volatile trading on Friday after a government report showed U.S. employers added fewer jobs in April than expected, adding to recent concern the economy was slowing. The euro edged lower, while the Australian and New Zealand dollars tumbled as the data prompted investors to shed riskier, growth-linked currencies for safer investments. U.S. employers added 115,000 workers last month, well below expectations of 170,000, though the unemployment rate fell to 8.1 percent as more people left the workforce and jobs growth data in previous months was revised upwards. "On balance, it was a disappointing report," said Vassili Serebriakov, currency strategist at Wells Fargo in New York. "It looks like it's kind of a risk-off environment where the yen is doing well." The dollar fell 0.4 percent to 79.86 yen after having hit a session low of 79.80, not far from a 10-week low of 79.62 yen set on Tuesday. Trading was volatile, with the pair bouncing between session highs and lows immediately after the release of the data. Some analysts said the jobs report, which followed weaker-than-expected services sector data earlier this week, will fuel expectations of a third round of quantitative easing by the Federal Reserve. "The headline disappointment increases the likelihood that (Fed Chairman Ben) Bernanke will move forward with QE3 later this summer in an attempt to further bolster employment growth," said Michael Woolfolk, senior currency strategist at BNY Mellon in New York. But other analysts, such as Ronald Simpson, managing director of global currency analysis at Action Economics in Tampa, Florida, said the latest rhetoric from Bernanke and other Fed officials suggests the central bank is "solidly on hold for the time being. "The U.S. data have been a little bit soft over the last week or so, but we're still expanding," he said. "I don't think there's any reason to panic, maybe later, but not yet." U.S. short-term interest rates futures were little changed after latest job data, implying nearly no change in traders' expectations in Fed policy. The euro fell 0.3 percent to $1.3117. The common currency came under pressure after a survey showed the euro zone services sector contracted much more than initially thought in April, with particularly weak figures out of Italy and Spain. Investors were cautious ahead of weekend elections in France and Greece, the results of which may stir doubts about the countries' commitment to fiscal austerity. Market participants fear that parties that disagree with Europe's focus on fiscal discipline will gain sway. Link this Share this Digg this Email Reprints

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