Tags: Dollar

Dollar Moves Lower After Weak US Jobs Report

Friday, 06 Aug 2010 11:15 AM

The dollar fell Friday after a weak report on July jobs highlighted the country's tough labor market, increasing expectations that economic growth would slow in the second half of the year.

The euro, which is used by 16 European countries, jumped above $1.33 for the first time since May, while the British pound topped $1.60 for the first time since February. The Japanese yen hit a 9-month high versus the U.S. dollar.

In midmorning trading in New York, the euro climbed to $1.3323 from $1.3179 late Thursday, the British pound rose to $1.5987 from $1.5878 and the dollar slipped to 85.25 Japanese yen from 85.87 yen.

The Labor Department said Friday that the economy lost 131,000 total jobs last month as the federal government laid off temporary Census workers. Private employers added just 71,000 jobs, far below the 200,000 needed each month to bring down the unemployment rate, which remained at 9.5 percent in July.

Last month's weak job growth comes after the Federal Reserve's recent downgrade of its economic forecast for the U.S. economy. The report could push the Fed to try to stimulate the economy in new ways, like it did during the height of the financial crisis, that weighed on the dollar. It is also expected to keep interest rates at record lows for longer than previously anticipated.

That has been weighing on U.S. bond yields, making U.S. debt, and the dollar that buys it, a less attractive investment than the debt and currencies of many foreign countries, said Ashraf Laidi, chief market strategist at CMC Markets in London.

Gloom about slowing U.S. growth has coincided with optimism about a better European outlook since its debt crisis earlier this year has eased. European Central Bank president Jean-Claude Trichet said Thursday that Europe is doing better than expected but growth will remain "relatively modest."

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The dollar fell Friday after a weak report on July jobs highlighted the country's tough labor market, increasing expectations that economic growth would slow in the second half of the year.The euro, which is used by 16 European countries, jumped above $1.33 for the first...
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2010-15-06
 

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