Finotec

The green buck slips to a 15-year low against a basket of currencies after data showing U.S. employers cut jobs for the first time in four years, supporting the analyst’s expectations for a big Federal Reserve rate cut this month.

Nonfarm Employment Change data in US showed in Friday that the companies cut 4 thousand jobs last month, the first decline since August 2003, leading investors to see a bigger chance that the Fed will cut rate by 0.5% from current level 5.25% to protect the economy from the housing market crisis.

Investors continue to sell the dollar this morning after the unexpected drop in U.S. jobs. "The trend in the dollar is clearly downward," said Tsutomu Soma, a senior manager of foreign securities at Okasan Securities.

We can see the dollar reached a lowest level this morning against the yen at 112.70 but trimmed its losses on buying by Japanese importers which pushed the pair USD/JPY up to the level of 113.35 today, a little bit down from highest level around 113.40 yen in late U.S. trading on Friday.

A 2.2 percent fall in Japan's Nikkei share average, following a decline on Wall Street, prompted investors to trim risky yen carry trades, pushing down the dollar and higher-yielding currencies against the yen. Japanese importers bought the dollar aggressively, helping limit its losses.

In yen carry trades, investors use the low-yielding yen to finance purchases of assets with higher returns elsewhere. That kind of trade played a big part in the yen's fall to a trade-weighted and inflation-adjusted 22-year low in June.

Japanese government data on Monday showed that Japan's economy decrease 0.3% in April-June from the previous quarter, against an initial estimate of 0.1 percent growth. The gross domestic product data reinforced expectations that the Bank of Japan is likely to leave interest rates unchanged at 0.5 percent at a September 18-19 policy meeting.

Today the market will be focused on the PPI input data from England which will be released at 8:30 GMT. Positive data above the expectation of -0.2% will provide to investors green light to open long position on sterling. Also later this day will be published Consumer credit data in US at 7:00 GMT, decrease expected can push the US dollar much lover against the majors.