US jobs report raises risk appetite

US jobs report raises risk appetite

Story link: US jobs report raises risk appetite

TAGS:

The US dollar was weaker in relation to the Australian dollar Wednesday after a private report said that the US lost fewer jobs last month than had been expected, making investors more confidence in seeking out risky trades for higher-yielding currencies.

ADP Employer Services said that the US dropped 491,000 jobs in April, over 150,000 fewer than had been expected by analysts.

However, the official Labor Department report on jobs in April is expected to show a job loss in the private sector and government of 608.000 positions last month.

The ADP report only takes private sector jobs into consideration.

In late morning trade in New York, the greenback traded at 74.43 cents US to the Australian dollar while it was $1.33 to the euro.

At the same time the yen was at ¥98.74 to the US dollar and at ¥131.3207 to the euro.

Among western hemisphere currencies, the Brazilian real traded at 2.1243 to the dollar while the Mexican peso was at 13.235 to the greenback.

The peso’s gains came on comments from Mexico’s Health Minister that fewer cases of the H1N1 flu virus are being reported there.

The pound was weaker versus the euro, the US dollar and the yen on concerns that the US government report on banks, due Thursday, will say that Bank of America (NYSE: BAC) needs to raise $34 billion.

Losses for the pound could be limited, however, by a new report from the Chartered Institute of Purchasing and Supply which shows that an index of the UK services sector was up a little more than 3 points in April from March and by a separate report from Nationwide Building Society that consumer sentiment is up in the UK.

At shortly after 11 a.m. in New York the pound traded at 88.35p to the euro while it took $1.5053 to buy a pound and the UK currency was worth ¥148.6377.