Reuters: US Dollar Report: FOREX-Dollar drops vs yen on jobs data, euro tumbles broadly

Reuters: US Dollar Report Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

FOREX-Dollar drops vs yen on jobs data, euro tumbles broadly May 4th 2012, 18:44 Fri May 4, 2012 2:44pm EDT * U.S. economy adds 115,000 jobs in April, well below forecast * Yen soars on safe-haven flows; Aussie, kiwi tumble * Weak data, weekend elections keep euro vulnerable By Julie Haviv NEW YORK, May 4 (Reuters) - The dollar slumped against the yen, but gained against growth-linked currencies in volatile trading on Friday after U.S. jobs data provided further evidence the economic recovery was losing momentum. A third straight monthly decline in U.S. hiring growth also weighed on the euro, which fell for a fifth straight session against the greenback and tumbled against the yen, ahead of the weekend's key political elections in France and Greece. U.S. employers added 115,000 workers last month, well below expectations of 170,000. The data followed a string of weak readings on the economy that fueled speculation of more monetary stimulus from the Federal Reserve. "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 last traded down 0.4 percent at 79.86 yen, but against the Australian and New Zealand dollars it gained 0.8 percent and 0.6 percent, respectively, as investors shed riskier currencies that are highly linked to global growth. Some analysts said the jobs data, combined with recent weaker-than-expected services sector and first-quarter economic growth data, may spur the Federal Reserve to embark on a third round of bond buying to spur growth. Others downplayed the scenario of further so-called quantitative easing, but said it should make the central bank maintain the policy status quo. EURO SWOONS BEFORE ELECTIONS The euro fell as low as $1.3078, its lowest since April 19, and last traded at $1.3084, down 0.5 percent. Against the yen, the euro was down 0.9 percent at 104.48, down 0.9 percent. The most immediate risk for the euro comes from this weekend's French and Greek elections. Opinion polls showed socialist Francois Hollande will be elected as the next French president. In Greece, surveys showed no clear winner emerging from the elections, with the two parties garnering barely enough seats for a parliamentary vote. "We have been focused on the short euro/dollar trade over the last two weeks, and it is starting to work," said Jens Nordvig, global head of foreign exchange strategy at Nomura Securities in New York. "A Hollande victory could be a catalyst for additional weakness, depending on what he says, and a split parliament in Greece would also be a negative," he said. "We think a break of $1.30 is highly likely in coming weeks." The euro has been trading in a tight range of $1.30 to $1.34 in recent weeks but analysts said worries about a deepening recession in the euro zone suggest a break lower. Indeed, adding to pressure on the euro was a survey showing the bloc's services sector contracted much more than initially thought in April, with particularly weak figures out of Italy and Spain. An increased bias for euro puts, or bets on a currency depreciating, was evident in the options market, with three-month risk reversals trading at -2.325 vols, up from -2.3 vols the previous day and -2.1 vols a week earlier. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions