Jobs, manufacturing data help greenback

Story link: Jobs, manufacturing data help greenback

The US dollar strengthened after the Labor Department reported that the United States economy lost only 51,000 jobs in July, fewer than the 75,000 that had been expected to be lost and although the unemployment rate jumped to 5.7 percent, its highest level in over four years.

A separate report from the Institute for Supply Management showed its factory index down to 50, a better reading than had been anticipated, indicating that US manufacturing neither expanded nor contracted in July.

In late morning trade in New York, the dollar traded at $1.5581 to the euro while it took ¥107.4650 to buy a dollar.

The shared currency also weakened in relation to the yen as it took ¥167.4465 to buy a euro.

The euro was hurt by a report from the German Federal Statistics Office which showed that retail sales there was down 1.4 percent in June, while the yen benefited form a retreat in enthusiasm for carry trades, in which investors finance purchases of higher-yielding currencies with lower-yielding currencies such as the yen.

The pound weakened versus the greenback after the Chartered Institute of Purchasing and Supply issued new data showing a decline in manufacturing activity, fueling worries that the UK is about to enter a recession.

It took $1.9748 to buy a pound at around 11:15 a.m. in New York, while the UK currency traded at 78.90p to the euro.

The Australia and New Zealand dollar were also weaker in relation to their US counterpart on reports that manufacturing activity slowed in Australia and that business confidence is down in New Zealand, and on speculation that interest rates could drop in both countries, from their current 7.25 percent in Australia and 8 percent in New Zealand.

At late morning in New York the Australian dollar traded at 93.32 cents US and the New Zealand dollar was worth 72.84 cents US.