FOREX-Dollar rallies, bolstered by U.S. jobs data

Fri Jun 7, 2013 9:57am EDT

Related Topics

* U.S. non-farm payrolls report showed solid jobs creation
    * Dollar trims losses vs yen

    By Gertrude Chavez-Dreyfuss
    NEW YORK, June 7 (Reuters) - The dollar recovered in choppy
trading on Friday as a government report showed a reasonably
healthy pace of U.S. job creation last month, suggesting a
stabilizing labor market. 
    Investors had been pricing in a downbeat number going into
the non-farm payrolls data after Wednesday's
softer-than-expected U.S. private-sector employment survey and a
weak employment figure in the Institute for Supply Management's
non-manufacturing report.
    The report showed that the U.S. economy created 175,000 jobs
last month, with the unemployment rate edging higher to 7.6
percent. However, analysts were heartened by the separate
household survey, which showed employment of 319,000 in May. 
    Still, the report does not resolve questions about whether
the Federal Reserve would start cutting-back its quantitative
easing program. Traders of short-term U.S. interest rate futures
continued to expect the Fed to hold rates near zero until early
2015.
    "It's a better-than-expected report, if just barely so,"
said Michael Woolfolk, senior currency strategist at BNY Mellon
in New York. 
    "I think the markets will view this favorably. There is
still a lot of uncertainty about the direction of interest
rates, though, and this will be a volatile summer. The debate
about tapering by the Fed will not be resolved by Labor Day."
    In early New York trading, the euro fell 0.3 percent on the
day. It hit a three-month peak of $1.3306 on Thursday
after European Central Bank President Mario Draghi gave no hints
that further monetary easing was imminent.
    The dollar, meanwhile, trimmed losses against the yen
to trade at 97.12 yen, up 0.1 percent. Just before the U.S. jobs
report, the dollar was down 1.6 percent. On Thursday, the
greenback suffered its biggest one-day fall against the yen in
three years.
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A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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