By Chuck Butler, editor of Currency Capitalist
www.worldcurrencywatch.com

There’s something else I need to address this morning that deserves front page notice. It’s the ADP jobs report that printed yesterday.

Up until this report hit the news, the stock jockeys were feeling pretty cocky. The risk takers were back in the driver’s seat in the market. (You could tell risk takers were back because the Aussie dollar rose to .7270!)

But then this ADP report came out. Traders dumped their holdings. Suddenly the DOW lost all its 2009 gains. In the currency market, the risk takers lost their nerve. The Aussie dollar is barely holding on to 70-cents!

I bet by now you'd like for me to tell you what the ADP report showed, eh? Well, good things come to those who wait... According to ADP, private payrolls collapsed during December by 693,000, far exceeding the expectations for a very poor report (-495,000 forecast).

This report is NOT the Jobs Jamboree by the Bureau of Labor Statistics (BLS). We’ll finally get to see that report tomorrow. But this report supposedly changed their methodology to mirror the BLS. So, if that's true, we're in for trouble tomorrow morning!

Roughly 2.5 million jobs were lost in 2008. Most likely the worst year for jobs since 1945...We'll have to wait-n-see tomorrow, but this isn't a good indication of what to expect, eh?

So, foreign currencies rallied at first yesterday when the CBO made their announcement about the Budget Deficit. But most of the majors handed those gains right back when this dismal ADP Report came out. The report forced the risk takers to take their bat and ball and go home, leaving the currencies to back off.

Of course, in an opposite action of most currencies, the Japanese yen rallied yesterday and last night. Nothing new here. Right now, either the risk takers are buying and causing the yen to drop. Or they’re not in the market causing yen to gain. Very simple.