US dollar drops on employment data

US dollar drops on employment data

Story link: US dollar drops on employment data

TAGS:

The US dollar fell to one-month lows against both the euro and the yen on Friday after the US Labor Department reported that jobs growth in December fell to its lowest level in four years and the unemployment rate jumped to 5 percent, from 4.8 percent in November.

The report showed that only 18,000 new jobs were created in the United States in December, against a prediction that 70,000 jobs had been created during the month.

Declines were eased, however, after the Institute for Supply Management reported that it index of non-manufacturing business activity in the US dropped to 53.9 in December, less than the reading of 53.5 that had been predicted.

The greenback fell to as low as $1.4825 to the euro and ¥107.91 to the yen during the session and was trading at $1.4764 to the euro and at ¥108.5650 at just before 1 p.m. in New York.

Meanwhile, the pound was higher in relation to the dollar and traded about even versus the euro after the Chartered Institute of Purchasing and Supply index reported that the service industry index was at 52.4 in December when it had been predicted to drop from November’s 51.9 to 51.6 in the month.

Also helping the pound was a report that wages in the UK were up more in the past quarter than they had been in more than 10 years.

It took $1.9751 to buy a pound in late trade in London, while by early afternoon in New York it still took $1.9716 to buy a pound, still a bit more than Thursday’s close.

The pound hit another record low at 74.90p to the euro, but it traded at 74.88p to the euro in New York just after midday.

The yen was stronger on the day as the US employment data sent investors looking for safe places to put their money, gaining the most against the Brazilian real and the Australian dollar.

At nearly 1 p.m. in New York the yen traded at ¥61.831 to the real and at ¥94.9292 to the Australian dollar, while it was at ¥160.2800 to the euro and at ¥214.0465 to the pound.

The flight from risk also benefited the Swiss franc, which traded at SFr1.1078 to the US dollar, at SFr1.6355 to the euro, and at SFr2.1841 to the pound.