US financial crisis deteriorates as dollar drops

US financial crisis deteriorates as dollar drops

03-07-2009 13:45

Investors expect the labor reports, which will be released today, to show deterioration in the US recession as the dollar fell against all major currencies, after yesterday’s positive results. The dollar may be boosted by a less negative nonfarm payrolls report but may result in the dollar selling and turn into a real rally if the report disappoints.

Japanese yen rises on possible US rate revision

For the second day the Japanese currency is the only major currency that gains against the greenback. Moody’s rating agency announced yesterday the possibility to modify the credit ratings of the three major US banks. After this news the Japanese yen started to rise.

Enormous impact nonfarm payrolls report on dollar

However, the expectations for the nonfarm payrolls to show a record fall (since 1949) form the major threat for the dollar. Should the nonfarm payrolls report disappoint the expectations, it may result in the dollar selling and in a real really, which may last until next week. Analysts believe that today’s fall could be quickly snapped by the dollar in case of less negative results.