U.S. Dollar Slides against Major Currencies upon Release of Labor Statistics

The U.S. Dollar continues to fall against major currencies as the U.S. Labor Department announced that the U.S. economy lost approximately 63,000 jobs in February 2008.  This report is perceived as a good indicator of U.S. economic performance, showed that the payroll in the non-farm sector decreased for the second consecutive month.

According to some analysts, investors in Asia are selling the U.S. Dollar because of increased risk aversion due to the perceived state of the U.S. economy.  Mr. John Noonan of Thompson/TFR Markets said that the liquidity problems, which was triggered by the sub-prime lending activities in the U.S. has increased concerns that major financial institutions would continue to experience liquidity difficulties, which may lead to systemic risk. 

As part of its attempt to ease the credit crunch, on Friday, March 7, 2008, the Federal Reserve announced that the size of its auctions to banks on March 10th and March 24th will be increased to $50 billion each, instead of $30 billion, as announced earlier.

On Monday, March 10th at 00:47 GMT, the U.S. Dollar traded at 102.38 yen on the Tokyo exchange compared to 102.63 traded last Friday in New York.  Also, the Euro traded at $1.5378 on the Tokyo market compared to last Friday’s rate of $1.5350.

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