Daily currency report

The release of the US Non farm payrolls data forced the dollar to lose ground against all of the major currencies, as for the first time in four years the figure came out as a negative number.

GBP
The sterling benefited against the greenback as US poor jobless numbers gave rise to the view that the Fed will have to cut interest rates at its next meeting. However, sterling didn't do so well against the other majors as risk-averse investors pared positions in higher-yield currencies as the continuing issues in the US housing market are forcing investors to review their strategies and invest in far more cautious and secure markets.

USD
The dollar tumbled against a basket of currencies after data showed US employers cut jobs in August by 4,000 for the first time in since 2003 while many expected a gain of 100,000 jobs, leading investors to believe that the FED may cut interest rates by 50bp this month. However, based upon the measures seen so far, the FED is more likely to play it safe with cutting interest rates by 25bp.

EUR
The euro was close to reaching a record high versus the USD after the release of the US non farm payrolls data, also supported as the ECB maintained its hawkish bias on interest rates.

JPY
The yen edged up slightly and high yielding currencies slipped as Asian and European stocks moved lower and kept investors wary of holding risky positions following the release of the US jobs data. The Nikkei also fell by 2.2 per cent prompting investors to trim risky yen carry trades.

Commercial Foreign Exchange Travelex Malta, freephone: 800 77 33 22, www.travelex.com/mt/