Dollar falls against euro after grim US jobs data
NEW YORK, (AFP)
The dollar weakened against the euro Friday trade after another
horrific set of US employment figures dented its safe-haven allure.
The euro was at 1.2943 dollars at 2200 GMT, up from 1.2786 dollars
late Thursday.
The dollar rose to 91.83 yen from 91.13 yen.
The US Labor Department reported the US unemployment rate spiked to a
16-year high of 7.6 percent in January from 7.2 percent in December as
nearly 600,000 jobs were lost.
"Over the past two weeks, the US docket has set a severe pace for its
recession, showed the Fed (Federal Reserve) has few options left to
stabilize the economy and employment data showed the worst rate of job
losses for the world's largest economy on record," said John Kicklighter
at Forex Capital Markets.
Dealers said that after another eventful week, the currency markets
were still caught in a dilemma of sticking with the dollar for its
safe-haven attributes or taking on a little more risk and branching out.
"Through all of this, however, the dollar has not seen a significant
shift in trend. With fundamentals fully priced in and the sense of risk
maintaining the currency's safe-haven status, there are contradicting
influences balancing the dollar's demand," he said.
Weak US data has been supportive of the dollar in past months because
it encourages such safe-haven buying "and we continue to favor 'a buy
into the dips' mentality for the dollar," said Audrey Childe-Freeman of
Brown Brothers Harriman.Dealers noted that the euro may face more
pressure as the eurozone economy weakens further, with industrial output
in Germany, the region's biggest economy, down much more than expected
in December, figures showed on Friday. The British pound extended gains
won a day earlier when the Bank of England slashed its key interest rate
by 50 basis points to an all-time low of 1.0 percent.
Although low rates generally make a currency less attractive, that
logic has been upset in recent weeks amid expectations for a stimulative
effect that could lift sluggish economic activity.
In late New York trade Friday, the dollar slipped to 1.615 Swiss
francs from 1.1724 late Thursday.The pound rose to 1.4789 dollars from
1.4623.
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