Mobile  |  About us  |  Photos  |  Videos  |  Subscriptions  |  RSS Feeds  |  Today's Paper  |  Classifieds  |  Contact Us
The Daily Star
FRIDAY, 18 APR 2014
03:28 AM Beirut time
Weather    
Beirut
17 °C
Blom Index
BLOM
1,214.01down
International
Follow this story Print RSS Feed ePaper share this
Dollar drops as U.S. hires exceed forecasts
Bloomberg
Specialists Mario Picone, left, and Robert Nelson, center, work at their posts on the floor of the New York Stock Exchange.
Specialists Mario Picone, left, and Robert Nelson, center, work at their posts on the floor of the New York Stock Exchange.
A+ A-

The dollar fell against most major currencies after U.S. employers added more jobs than forecast in July even as the unemployment rate rose to a five-month high.

The U.S. currency weakened as stocks gained amid continued speculation that the Federal Reserve would start a third round of asset purchases to spur the economy. The euro rose versus most major peers after German lawmakers signaled they would not stand in the way of the European Central Bank’s plan to buy government bonds to help stem fiscal turmoil. Canada’s currency rose to parity with the greenback for the first time since May.

“The headline reading was good, but the supporting details not so good, so we have a little support for risk sentiment but not a game changer,” said Greg Anderson, North American head of Group-of-10 currency strategy at Citigroup Inc. in New York.

“The door is left open to easing, and now on the horizon it’s back to what will Europe do about Spain, Italy and Greece,” he added.

The dollar dropped 1.6 percent to $1.2373 per euro at 11:47 a.m. New York time. It was headed for a weekly loss of 0.4 percent. The U.S. currency appreciated 0.4 percent to 78.58 yen. Japan’s currency tumbled as much as 2.1 percent versus the euro, the most since June 29, to 97.27 before trading at 97.20.

The Dollar Index, which Intercontinental Exchange Inc. uses to track the greenback against the currencies of six major United States trading partners, fell 1.2 percent.

The greenback lost 0.6 percent in the past week versus nine developed-nation counterparts tracked by the Bloomberg Correlation-Weighted Indexes. The euro weakened 0.2 percent, while Sweden’s krona was the best performer, rising 1.8 percent.

Payrolls added 163,000 jobs following a revised 64,000 rise in June that was less than initially reported, Labor Department figures showed Friday in Washington.

The median estimate of 89 economists surveyed by Bloomberg News called for a gain of 100,000. Also, unemployment rose to 8.3 percent, from 8.2 percent.

The Federal Open Market Committee said on Aug. 1 after a policy meeting that it “will provide additional accommodation as needed” to spur growth and employment, while it refrained from expanding monetary easing this month. The central bank bought $2.3 trillion of assets in two rounds of the stimulus strategy called quantitative easing between December 2008 and June 2011.

“The employment report shows a strong headline reading, but we believe that most people, and importantly the FOMC, will resort to digging beneath the headlines to focus on the enormous uphill struggle facing the labor market,” Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. in New York, wrote Friday in a note to clients.

“The report should do little to change expectations for a further move in September from the Fed, and so one can understand why equities are happy to advance.”

The Standard & Poor’s 500 Index rallied 2 percent, rising for the first day this week. U.S. Treasuries fell, pushing the yield on the 10-year note up 10 basis points, or 0.1 percentage point, to 1.58 percent.

Canada’s dollar headed for its fourth straight weekly gain against the greenback. The Canadian currency, nicknamed the loonie, appreciated 0.9 percent to 99.84 cents per U.S. dollar and touched 99.80 cents, its strongest level since May 11.

South Africa’s rand was the biggest winner against the dollar, climbing 2.6 percent to 8.1388.

Gains in higher-yielding assets may be short-lived if the strength of the payrolls data diminishes odds of further measures for quantitative easing from the Fed, said Shaun Osborne at Toronto-Dominion Bank.

New Zealand’s dollar, nicknamed the kiwi, rose to a two-month high versus the greenback after S&P affirmed the nation’s credit rating, citing its fiscal flexibility, resilient economy and policy institutions.

The kiwi strengthened 1.1 percent to 81.93 U.S. cents and touched 81.98 cents, the highest since April 30. It appreciated 1.6 percent to 64.38 yen.

Japan’s yen fell against all of its 16 most-traded counterparts. The Japanese currency has weakened against the dollar for the first week since June 22.

The shared European currency erased a weekly loss Friday after retail sales in the 17-nation region unexpectedly increased in June.

They gained 0.1 percent from May, the European Union’s statistics office said, versus a Bloomberg News survey’s forecast of a 0.1 percent decline.

The euro slid Thursday as stocks and commodities fell after ECB President Mario Draghi failed to reassure investors that policymakers were ready to take immediate steps to curb the region’s debt crisis.

ECB officials are working on a plan to buy bonds and details will be released in coming weeks, Draghi told reporters Thursday after a policy meeting. The bank kept its key interest rate at a record low 0.75 percent.

 
A version of this article appeared in the print edition of The Daily Star on August 04, 2012, on page 5.
Home International
 
     
 
US stocks / United States of America / Economics
Advertisement
Comments  

Your feedback is important to us!

We invite all our readers to share with us their views and comments about this article.

Disclaimer: Comments submitted by third parties on this site are the sole responsibility of the individual(s) whose content is submitted. The Daily Star accepts no responsibility for the content of comment(s), including, without limitation, any error, omission or inaccuracy therein. Please note that your email address will NOT appear on the site.

comments powered by Disqus
Advertisement


Baabda 2014
Advertisement
Follow us on Facebook Follow us on Twitter Follow us on Linked In Follow us on Google+ Subscribe to our Live Feed
Multimedia
Images  
Pictures of the day
A selection of images from around the world- Thursday April 17, 2014
View all view all
Advertisement
Rami G. Khouri
Rami G. Khouri
Silencing Ayaan Hirsi Ali’s hate talk
Michael Young
Michael Young
Why confuse gibberish with knowledge?
David Ignatius
David Ignatius
Putin will keep rolling, until Obama says no
View all view all
Advertisement
cartoon
 
Click to View Articles
 
 
News
Business
Opinion
Sports
Culture
Technology
Entertainment
Privacy Policy | Anti-Spamming Policy | Disclaimer | Copyright Notice
© 2014 The Daily Star - All Rights Reserved - Designed and Developed By IDS