The US Dollar declined against the Japanese
yen after Non-farm payrolls came out less than forecast in March, increasing speculation
that the Federal Reserve will carry out further quantitative easing through economic stimulus.
Nonfarm payrolls increased by 120,000 last month which is the smallest increase in 5
months and less than the forecasted increase of 205,000. The unemployment rate fell to
8.2 percent which is the lowest since January 2009.
The Federal Open Market Committee led by Ben Bernanke has undertaken to keep the interest
rate at a record low of zero to 0.25 percent through 2014 and is resisting increasing monetary
accommodations unless expansion in the US economy declines or prices rise at a slower
rate that the 2 percent target. This is according to minutes of the central bank’s March 13
meeting which were released April 3. The US Dollar was last trading at 81.57 against
the yen which is a decrease of -0.95%. The Euro decreased 1.2 percent in the past
week as the Spanish Prime Minister Mariano Rajoy raised the possibility of a Spanish
bailout. Spanish bonds fell last week, increasing the yield on the 10-year benchmark bond to
as high as 5.84 percent. The euro traded at almost a three week low against the US Dollar
and data coming out next week may show that German exports fell and growth in French industrial
production slowed, adding to evidence that fiscal difficulties are holding back the economies
of the euro zone. Last Friday the Euro was trading at the level
of 1.3097, which is an increase of 0.25%. The Canadian Dollar rose against the US Dollar
after a report showed that it added the most jobs since 2008 in March and Canada’s unemployment
rate fell to 7.2 percent last month from 7.4 percent in February.
The Canadian dollar was last trading at the level of 0.9970, which is an increase of 0.41%.
In Commodities, Gold rose for a second day after US employers added less jobs than forecast
boosting prospect that the Federal Reserve will enact more stimulus measures to spur
growth. Gold has increased 86 percent since the end of 2008 as the Fed kept borrowing
costs at a record low. Gold was last trading at the level of 1,630.73
an ounce, which is a decrease of -0.01%.