FOREX-Dollar near 2-year lows vs euro on soft U.S. jobs data

Tue Oct 22, 2013 9:06am EDT

Related Topics

* U.S. economy adds 148,000 jobs, fewer than expected
    * Report delayed from early Oct due to U.S. govt shutdown
    * Strategist: Expectations may shift to more QE, not less

    By Gertrude Chavez-Dreyfuss
    NEW YORK, Oct 22 (Reuters) - The dollar fell to its lowest
in nearly two years against the euro on Tuesday after data
showed the U.S. economy added just 148,000 jobs last month,
cementing expectations that the Federal Reserve is likely to
keep its stimulus plan for the rest of the year.
    Economists were expecting jobs gains of 180,000 and the 
report covered the period before the government shutdown earlier
this month. With the two-week shutdown already expected to have
damaged the U.S. economy, the conviction that the Fed will not
reduce its asset buying anytime soon became even more
entrenched. 
    "Is the Fed getting tired of being right? Today's
underperforming jobs number fully justifies September's cautious
FOMC," said Joseph Trevisani, chief market strategist at
WorldWideMarkets in Woodcliff Lake, New Jersey. 
    "Full-bore quantitative easing will probably be with us
through the first quarter and speculation for an increase (in
QE) may be no further than another weak payroll."
    The unemployment rate did dip to 7.2 percent last month, the
lowest level since November 2008, but that has become irrelevant
in the wake of the U.S. government's closure. Economists
estimate the 16-day government shutdown shaved as much as 0.6
percentage point off annualized fourth-quarter gross domestic
product, through reduced government output and damage to both
consumer and business confidence. 
    In early New York trading, the euro hit a high of $1.3748
 against the dollar, its strongest level since Nov. 14,
2011. It was last at $1.3726, up 0.3 percent.
    Against the yen, the dollar fell as low as 97.86. It
last traded at 98.16 yen, flat on the day.
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