The dollar fell against most major counterparts after U.S. employers added more jobs than forecast in July even as the unemployment rate rose to a five-month high.
The dollar weakened as stocks gained amid continued speculation the Federal Reserve will start a third round of asset purchases to spur the economy. The euro rose versus most major peers after members of German Chancellor Angela Merkel’s coalition signaled they won’t stand in the way of European Central Bank President Mario Draghi’s plan to buy government bonds to help stem fiscal turmoil. South Africa’s rand climbed.
“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 G-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.”
The dollar dropped 1.2 percent to $1.2324 per euro at 9:51 a.m. New York time. The U.S. currency appreciated 0.5 percent to 78.63 yen.
Payrolls added 163,000 jobs following a revised 64,000 rise in June that was less than initially reported, Labor Department figures showed today in Washington. The median estimate of 89 economists surveyed by Bloomberg News called for a gain of 100,000. Unemployment rose to 8.3 percent, from 8.2 percent.
‘Neutral Number’
The Dollar Index, which International Exchange Inc. uses to track the greenback against the currencies of six major U.S. trading partners, fell 0.8 percent.
“The number is not strong enough for investors to change their mind on quantitative easing,” said Eric Viloria, senior currency strategist at Gain Capital Group LLC in New York. “Right now, it’s just still on the table, and this is a neutral number.”
The Fed said Aug. 1 after a policy meeting 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.
South Africa’s rand was the biggest winner against the dollar, climbing 2.1 percent to 8.1747.
The Standard & Poor’s 500 Index advanced 1.6 percent, while Treasuries fell, pushing the yield on the 10-year note up six basis points, or 0.06 percentage point, to 1.54 percent.
The euro slid yesterday as stocks and commodities fell after the ECB’s Draghi failed to reassure investors that policy makers 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 yesterday after a policy meeting. The bank kept its key interest rate at a record low 0.75 percent.
0 comments:
Post a Comment