Dollar drops after disappointing US jobs report
US Currency. AP FILE PHOTO
NEW YORK—The dollar tumbled against other major currencies Friday, driven lower after a surprisingly weak US jobs report cast doubt on the vigor of the nation’s economic recovery.
The dollar fell sharply against the euro. The European currency traded at $1.3666 around 2300 GMT, up from $1.3606 late Thursday.
The greenback slid to 104.15 yen from 104.79 yen. The euro also fell more moderately against the Japanese currency, to 142.33 yen from 142.58 yen.
Financial markets were shocked by the US Labor Department’s jobs report for December, which showed the economy added a mere 74,000 jobs last month, well below the consensus estimate of 197,000.
The unemployment rate dropped to 6.7 percent, from 7.0 percent in November, but that seemingly positive decline mainly reflected the fact that more people had given up looking for work.
Kathy Lien of BK Asset highlighted that the US job creation number was the worst since January 2011, low enough to encourage the Federal Reserve to moderate plans to wind down its massive asset purchases, or quantitative easing (QE), this year.
“The big question now is whether weak payrolls will slow the pace of Fed tapering or better yet, encourage policy makers to leave asset purchases unchanged this month,” Lien said.
“Based on the sell-off in the dollar, drop in US (bond) yields and recovery in stocks, investors believe that the central bank will be less aggressive with winding down QE in the first half the year.”
The dollar also weakened against the Swiss currency, to 0.9026 franc from 0.9066 franc.
But it was essentially flat against the British pound, which bought $1.6482.
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