The dollar had its biggest drop against the euro since January after a report showed the US jobless rate reached a 7 1/2-year high in April, fueling concern an economic rebound may be slower than projected.
Demand for the currency also waned as the Standard & Poor's 500 Index dropped to a six-month low this week on skepticism about the strength of the US expansion.
"People's perceptions of the US are not nearly as positive as they were," said Jonathan Clark, vice chairman of FX Concepts Inc, which invests US$4.5 billion in foreign exchange. "The US just isn't the place to invest that it used to be."
The US currency slid 1.56 percent to US$0.9173 cents per euro, from 90.32 yesterday, and reached its weakest level since Oct. 9.
It fell to ?127.01 from ?127.91, reaching the lowest point since March 7. The dollar fell for a fifth week against the euro, shedding 1.6 percent, and a third week against the yen, with a 0.7 percent loss.
The dollar will probably drop to at least 94 cents this month, which would be its weakest since February 2001, Clark said.
FX Concepts is betting the US currency will fall against the euro, Swiss franc, yen and Australian dollar, he said.
Traders sold dollars after the US said the unemployment rate rose to 6 percent, compared with expectations for a jump to 5.8 percent, from 5.7 percent in March.
International investors exiting US stocks and seeking a haven amid continued tension in the Middle East are selling dollars for European currencies, principally the Swiss franc, said traders. All three major US stock indexes fell on Friday.
Portfolio shifts
"You're seeing portfolio shifts out of the US and into other areas" by foreign investors, primarily toward Europe, said Peter Gerhard, head of foreign exchange at Goldman Sachs Group Inc. The dollar may dip to US$0.95, which would be its weakest level since January 2001, later this year, he said.
Some degree of weakening in the dollar is welcome news to US exporters, who have complained that their competitiveness has diminished relative to foreign rivals as the dollar has risen in recent years. It's still up 23 percent against the euro since the 12-nation currency's debut in 1999, making US-produced goods more expensive in Europe.
The dollar extended its declines today after a separate report showing that an index of US services, the biggest part of the economy, fell in April.
Statistics this week are underscoring that US growth will slow from its first-quarter rate of expansion of 5.8 percent, bringing it closer to other economies, said analysts. Growth will probably dip to a 3.4 percent pace in the second half of the year, according to the latest estimate of the Blue Chip Economic Indicators.
Some analysts said the dollar is weakening because of concern US inflation will pick up this year, given growing expectations the Federal Reserve will keep the US benchmark interest rate at a 40-year low of 1.75 percent in coming months.
Higher energy prices -- crude oil has risen by about a third this year -- are contributing to that concern, as is the drop in the dollar, which raises the cost of imports, they said.
Next week, the government is projected to report that US producer prices rose 0.4 percent in April, after a 1 percent increase in March.
"Foreigners are reluctant to buy more [US securities] in this type of environment," because of concern their returns will be eroded, said Harvinder Kalirai, senior strategist at State Street Corp in Boston.
In other trading, the dollar fell an eighth day in nine against the Swiss franc, to SF1.5871 from SF1.6090, losing 1.1 percent and reaching its weakest level since Sept. 26.
"We can certainly trade down to 1.55 no problem," which would be the lowest point since January 2000, said Goldman's Gerhard.
The dollar fell to US$1.4689 per British pound from US$1.4633.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last