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Solid US jobs data drives dollar higher

Published: March 10, 2012 | 9:15 am
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NEW YORK: A stronger-than-expected US job report Friday spurred the dollar higher against other major currencies, while worries about the eurozone remained despite Greece’s successful debt-swap deal.

The euro was at $1.3120 around 2200 GMT, down from $1.3274 at the same time Thursday.

The dollar firmed against the Japanese currency, reaching 82.44 yen from 81.56 yen late Thursday.

The euro slipped slightly to 108.19 yen from 108.28.

The single currency shared by the 17 eurozone countries weakened further against the dollar after the US Labor Department reported the economy added more than 200,000 for the third straight month in February.

US job growth – 227,000 new jobs – was much stronger than expected, while the unemployment rate held steady at 8.3 percent.

Analysts predicted the momentum in the ailing US labor market would keep any new economic stimulus from the Federal Reserve on hold.

“The strength of the employment data means that people are further questioning the likelihood that the Fed is going to do any further easing,” said Ray Attrill at BNP Paribas.

“In that sense the good data has been positive for the dollar.”

The euro, after rising sharply Thursday along with hopes that Greece would conclude the crucial debt swap with private bondholders by a midnight deadline, saw its glow eclipsed by the US nonfarm payrolls report.

The market shrugged off a global derivatives group’s declaration that Greece’s debt deal amounted to a “credit event” which triggers payment of $3.2 billion in credit default swaps (CDSs) to investors in Greek bonds.

The decision by the International Swaps and Derivatives Association had been expected after Greece’s private creditors signed on to a debt swap that will wipe off 107 billion euros worth of Athens’s debt.

“The euro’s lack of reaction to ISDA’s announcement is a good sign for the currency’s outlook this coming week as long as contagion can be avoided,” said Kathy Lien at GFT.

“With the triggering of CDS payments, ISDA has restored the credibility of the swap market, which at the end of the day is positive for risk,” she said.

The dollar also rose to 0.9183 Swiss francs from 0.9081 francs late Thursday.

It gained against the British pound, which traded at $1.5673 compared with $1.5829 the prior day.


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