The dollar weakened against its peers today dropping to 5 month lows overlooking data which revealed a greater than forecast increase in US nonfarm private employment in March as Federal Reserve Chair Janet Yellen’s remarks continued to put downside pressure on the greenback.  US nonfarm private employment increased by 200,000 in March ahead of forecasts for a rise of 194,000 following an increase of 205,000 jobs in February.  Yellen commented yesterday that global threats to the US economy such as lower oil prices and doubt regarding outlook on China’s economy warranted a more diligent approach in connection to stricter monetary policy.  Her remarks had diverged from those made recently by other Fed officials which indicated that the central bank could implement rate increases as early as next month.  The US dollar index was down 0.57% trading at 94.63 marking its lowest level since October 16.  

The euro strengthened against the dollar with the pair up 0.23% trading at 1.1320 off its session high of 1.1365 after having come off its session low of 1.1282 reached earlier in the day.  The euro surged to 1.5 month highs against a broadly softer dollar as Fed Chair Yellen’s comments continue to trigger selling interest in the greenback.  With the euro zone’s consumer price index expected to reveal an uptick in the core rate of inflation the euro may show a bullish reaction to the report which limits the European Central Bank’s scope to implement more non-traditional measures this year.    

The pound weakened against the dollar with the pair down 0.11% trading at 1.4369 off its session low of 1.4360 after having come off its session high of 1.4458 reached earlier in the day.  The pound has been without question the worst performer among the other majors this year, however the selloff which characterized the beginning of this year has come to an end and the pound could be forming a base.  Although with Britain’s potential exit from the European Union still hanging in the balance the next big move in the pound could in all likelihood be lower.    

The yen strengthened against the dollar with the pair down 0.13% trading at 112.55 off its session low of 112.01 after having come off its session high of 112.80 reached earlier in the day.  The yen was slightly weaker during the Asian session after data revealed that factory output for Japan registered its biggest decline in February since the 2011 earthquake and tsunami that wiped out the supply chain, dropping 6.2% compounding forecasts of a 6.0% decline.  The data added to concerns that Japan’s economy is on the brink of entering into recession territory.   

The Australian, New Zealand and Canadian dollars strengthened against the greenback as commodity associated currencies were supported by a rebound in oil prices after a lower than forecast increase in crude oil stockpiles last week.  The Aussie dollar was up 0.41% against the greenback with the pair trading at 0.7658 off its session high of 0.7708 after having come off its session low of 0.7615 reached earlier in the day.  The kiwi dollar surged against the greenback with the pair up 0.85% trading at 0.6907 off 5 month highs of 0.6965 after having come off its session low of 0.6839 reached earlier in the day.  The loonie rallied 0.81% against the dollar with the pair trading at 1.2967 off its session low of 1.2911 after having come off its session high of 1.3080 reached earlier in the day. 

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