Connect to share and comment

Solid US jobs report sends dollar higher

PlacardEnlarge
(Globalpost/GlobalPost)

The dollar got a strong boost Friday after the Labor Department reported a solid 236,000 jobs were generated in February and the US unemployment rate fell to 7.7 percent from 7.9 percent in January.

Analysts said the underpinnings of the data -- showing more labor market dropouts and still-high long-term jobless numbers -- suggested the data was not enough to prod the Federal Reserve to tighten monetary policy.

But the forex market still saw it as dollar-positive, sending the greenback up more than one cent against the euro to $1.3004 at 2200 GMT, compared to $1.3107 late Thursday.

The dollar also shot up against the yen, hitting 95.97 yen from 94.83 yen.

The euro was only slightly higher against the yen, at 124.83 from 124.28.

"The market was primed for a solid report, but today's data beat even most of the bullish expectations indicating that the US economy continues to outperform" the world's other top economies, the eurozone and Japan, said Boris Schlossberg of BK Asset Management.

Most analysts though saw a limited upside to the dollar until the jobs growth can be confirmed in coming months.

"With the participation rate falling -- a sign that the labor pool may be shrinking -- the report isn't as good as it seems on the surface level," said Christopher Vecchio of Daily FX.

"Instead, like the January report, it is likely to be perceived by the Federal Reserve as another step in the right direction, but not a big enough stride to warrant a reconsideration of the current pace of QE3," he said, referring to the Fed's huge bond-buying program, which pumps liquidity into the economy.

The dollar's surge also came at a cost to the British pound, which sank below the $1.50 line to its lowest level since June 2010, hitting $1.4900 before settling at $1.4921, compared to $1.5012 Thursday.

The dollar also rose on the Swiss franc, to 0.9511 francs from 0.9425 francs.

pmh

http://www.globalpost.com/dispatch/news/afp/130308/solid-us-jobs-report-sends-dollar-higher