USD falters after Employment Report

Predictably, The USD was down across the board today after the after US labor department released an unexpectedly weak employment report. Analysts were way off on their estimation of 110,00 new jobs this quarter; the real number, a 4,000 job loss.

• The announcement backed up the expectation that the Fed will cut interest rates in two weeks at a policy meeting. Following the release of the report the following changes were noted:
• the 2-year Treasury note yield fell below 4% for the first time in 2 years and the 10-year note dropped to a 9-month low. Interest-rate futures pricing showed traders added odds on a 50 basis point rate cut on September FOMC to 74% from 42% before the non-farm payrolls.
• The euro broke the 1.37 handle and gained sharply to test the 1.38 level against the dollar.
• The sterling also rallied more than 100 pips to as high as 2.0323 versus the dollar, while the yen strengthened to 113.15 from above 115 versus the dollar.