The dollar declined to a one-month low 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. Canada’s currency advanced to the highest versus the greenback since November on the nation’s unexpected addition of jobs in April. The yen slid versus all but two 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 yields. “The prevailing flow now is negative for the dollar, negative for the yen, positive for the commodity-linked currencies and higher yielders,” said Michael Woolfolk, senior currency strategist at Bank of New York Mellon in New York. “Right now the report is given a positive spin by the market. The market is grabbing on the green-shoot rally.” The dollar lost 0.6 percent to $1.3473 versus the euro at 10:22 a.m. in New York, from $1.3390 yesterday. It touched $1.3516, the weakest level since April 6. The U.S. currency traded at 99.14 yen, compared with 99.12. The euro increased 0.7 percent to 133.64 yen, from 132.71. The euro-dollar exchange rate rose today above its 200-day moving average for the first time since December. Brazil’s real advanced as much as 1.6 percent to 2.0814 per dollar and the South Korean gained 1.5 percent to 1,245.50, the strongest levels since October, as signs the global slump may be ending encouraged investors to purchase emerging-market assets. Dollar Index The Dollar Index, which the ICE uses to track the greenback against the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc, fell 0.7 percent this week to 83.390. 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. “Things are improving a little bit faster than people were expecting,” said Sebastien Galy, a currency strategist at BNP Paribas Securities SA in New York. “People have been so bearish on the euro in general. Indeed, what we’re seeing is euro-dollar breaking higher, and our recommendation is to buy the euro.” The euro may rise to $1.40 in two weeks, he said. The dollar was headed for a third weekly decline versus the euro, weakening 1.6 percent in the longest losing streak this year. Against the yen, the dollar was little changed this week, while the euro rose 1.7 percent. Hiring in Canada The Canadian dollar increased as much as 1.1 percent to C$1.1572, the strongest level since Nov. 5, on the Canadian labor report. The currency was up 2.3 percent this week. Employers in Canada added a net 35,900 workers in April after a reduction of 61,300 in the previous month, Statistics Canada said today in Ottawa. The median forecast of 24 economists surveyed by Bloomberg was for a drop of 50,000. The yen dropped 4.3 percent to 59.08 versus the New Zealand dollar and 3.8 percent to 75.22 against the Australian dollar this week as a more optimistic global economic outlook prompted investors to get funds in a country with low borrowing costs and buy assets where returns are higher. 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. Japan’s currency touched 75.75 versus the Aussie yesterday, the weakest level since Oct. 7, and reached 59.51 against the kiwi, the weakest since April 6. Yen and Toyota 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 today a second consecutive annual loss as the global recession curbed demand for new cars and the yen eroded the value of dwindling overseas sales. The euro gained versus the dollar this week on speculation the European Central Bank’s plan to buy 60 billion euros ($80.5 billion) in covered bonds isn’t aggressive enough to debase the currency. President Jean-Claude Trichet told reporters yesterday 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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