| |
| |
 |
| |
|
| |
|
| |
|
NEW YORK: The US dollar found fresh momentum on Thursday after a disappointing US unemployment report sent shockwaves through financial markets, pushing investors to safe havens.
The euro was changing hands at 1.3997 dollars at 2100 GMT compared to 1.4146 dollars late on Wednesday.
The dollar dipped meanwhile to 95.94 yen from 96.64 yen late on Wednesday.
Analysts said the market action was due to dealers buying up the dollar and yen, seen as "safe haven" currencies during troubled economic times, and selling the euro which is seen as riskier on currency markets.
A closely watched US Labour Department report showed US job losses had surged to 467,000 in June, pushing the unemployment rate to a new 26-year high of 9.5 percent, dampening hopes for an early recovery from recession.
The report, seen as one of the best indicators of economic momentum, reversed the improvement seen last month when job losses fell to 322,000.
Analysts had expected a June number of 365,000 job losses, but a higher unemployment rate of 9.6 percent. The jobless rate in May was 9.4 percent.
While stock markets sold off sharply on the disappointment, the reaction on currency markets was muted.
"The important thing to remember is that job losses are still well off their January 2009 high of 741,000 and as long as we stay below 500,000 job losses, the labour market and the US economy is still moving in the right direction," said analyst Kathy Lien, writing on the website FX360.
Also on Thursday, the European Central Bank kept its main interest rate steady at a record low of 1.0 percent as ECB chief Jean-Claude Trichet downplayed a threat of deflation in the eurozone.
But Boris Schlossberg of Global Forex Trading said Trichet's comments provided "no cheer for euro bulls."
"Trichet essentially reaffirmed many of the policy points made in the past but refused to comment directly on the issue of encouraging credit expansion in the eurozone which may be hurting the recovery efforts in the region," he added.
The ECB expects "the current episode of extremely low or negative inflation rates to be short-lived," Trichet told a press conference two days after an EU estimate said eurozone consumer prices had fallen for the first time in June.
Economists are concerned the 16-nation bloc's economy will struggle to recover from recession if consumer prices fall broadly over a sustained period.
That encourages households to postpone purchases in expectation of still lower prices, undermines production and threatens job numbers that are now starting to contract sharply in countries like Ireland and Spain.
Schlossberg said the comments fanned fears that the eurozone would lag the United States in recovery from recession.
In late New York trade, the dollar firmed to 1.0844 Swiss francs from 1.0744 on Wednesday.
The pound eased to 1.6390 dollars from 1.6483. - AFP/de
|
