The dollar declined against the euro as a government report showed U.S. employers cut fewer jobs last month than economists forecast, reducing demand for the safety of the greenback. The yen slid versus all of the 16 most actively traded currencies tracked by Bloomberg and touched a seven-month low against Australia’s dollar this week as evidence the recession is easing spurred demand for higher-yielding assets. “You’ll see the trend of dollar weakness against the growth currencies continue,” Brian Kim, a currency strategist at UBS AG in Stamford, Connecticut, said before the report was released. Investors are “once again going to that green-shoots camp,” he added. The dollar lost 0.7 percent to $1.3483 versus the euro at 8:35 a.m. in New York, from $1.3390 yesterday. The U.S. currency traded at 99.15 yen, compared with 99.12. The euro increased 0.7 percent to 133.65 yen, from 132.71. U.S. companies eliminated 539,000 jobs in April after a decrease of 699,000 in the previous month, the Labor Department reported today in Washington. The median forecast of 70 economists surveyed by Bloomberg was for a drop of 600,000. The unemployment rate increased to 8.9 percent. The Dollar Index, which the ICE uses to track the greenback against the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc, fell 0.9 percent this week to 83.763. Applications for jobless benefits unexpectedly dropped to 601,000 in the week ended May 2, the least since late January, the Labor Department reported yesterday. Productivity rose at a 0.8 percent annual rate from January through March, after a 0.6 percent decrease in the fourth quarter. Dollar Versus Yen The dollar appreciated against the yen on April 3, when the U.S. government reported job losses that were close to economists’ forecasts. The yen dropped 4.5 percent to 59.21 versus the New Zealand dollar and 3.9 percent to 75.37 against the Australian dollar this week on bets the worst of the global recession may be over, prompting investors to get funds in a country with low borrowing costs and buy assets where returns are higher. Japan’s currency touched 75.75 versus the Aussie yesterday, the weakest level since Oct. 7. The Bank of Japan’s target lending rate of 0.1 percent compares with 3 percent in Australia and 2.5 percent in New Zealand. The yen dropped 9 percent against the dollar this year after touching 87.13 in January, the strongest since 1995. Toyota Motor Corp., the world’s largest automaker, forecast a second straight annual loss as the global recession curbed demand for new cars and a stronger yen eroded the value of dwindling overseas sales. ECB’s Decision The European Central Bank cut the key interest rate to a record 1 percent yesterday and unveiled a plan to buy 60 billion euros ($81 billion) in covered bonds. President Jean-Claude Trichet told reporters in Frankfurt the purchase of debt is a “credit easing.” Covered bonds, known as Pfandbriefe in Germany, are secured by property loans or lending to public-sector institutions and differ from mortgage-backed securities because they’re also supported by a borrower’s pledge to pay. They have traditionally been considered among the safest bonds available, allowing lenders to pay less interest.

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