Dollar drops sharply in early US session after release of much weaker than expected job data. The non-farm payroll reported showed merely 54k growth in the employment market in May, comparing original expectation of 190 and post ADP-disappoingment adjusted expectation of around 100k. That was the worst number since September 10. Unemployment rate also unexpected rose to 9.1%. Dollar is seen sharply lower against Japanese yen and Swiss Franc after the release. Indeed, USD/CHF made another record low below 0.835 level while USD/JPY is pressing 80 psychological level. The yen and swissy are both strong in crosses and thus, somewhat limiting Euro and Sterling’s attempt to rise against dollar. On the other hand, commodity currencies are sharply lower on risk aversion.

Sterling slips further today after release of weaker than expected PMI services, which dropped to 53.8 in May versus expectation of 54.2. Note again that PMI manufacturing released earlier this week was also disappointing, dropped to a 20 month low of 52.1. Also, add that to BoE Fishers comments that he might vote for expanding the asset purchase program should economic condition worsens. Markets are starting to think that BoE might not raise rates at all this year. On the other hand, EUrozone PMI services was revised higher to 56 in May.

There were rumors circulating today that there is a new three year bailout plan agreed for Greece that supersede the current EUR 110b EU/IMF program. It’s believed that in exchange for the new program, Greece has agreed to target another EUR 6.4b in austerity plan and starts its EUR 50b privatization program. The size of the program is unknown but a Greek newspaper reported that the package will include EUR 30-40b from EU and IMF loans and the rests from privatization proceeds and from private sector debt relief. Details are expected to be finalized for EU finance ministers sign off on June 20.

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