U.S. Jobs Data put Risk Back on Table

This morning’s better than expected U.S.Non-Farm Payrolls data has put risk back on the table.

This morning’s better than expected U.S. Non-Farm Payrollsdata has put risk back on the table. Although this report showed that theeconomy was still shedding jobs, private sector hiring was above the consensus,driving investors into equities and out of gold and Treasuries.

The shift in risk sentiment is driving the U.S. Dollar lowerespecially against the commodity-linked currencies. The Japanese Yen is alsogetting punished as traders leave the safety of the lower yielding currency.

Upside momentum is building in the Australian Dollar,putting it in a position to test the early August top at .9221. Recent economicdata has also led to speculation that the Reserve Bank of Australia willraise interest rates at its next meeting on September 7.

The USD JPY is trading sharply higher this morning. The risein demand for stocks appears to be reviving the carry trade. This is asituation where investors borrow the lower yielding Yen then sell it to investin higher yielding assets. The chart pattern suggests a possible double-bottomformation. This pattern will be confirmed if 85.90 is broken and at the sametime will signal a change in trend to up.

Traders should remember that Monday is a holiday and tradingmay thin out as the session progresses. The President is also speaking todayand that may cause traders to move to the sidelines.