Sun, Mar 12, 2006 - Page 10 News List

Robust report on US jobs creation boosts greenback


The US dollar got a boost on Friday after a robust report on US job creation fueled expectations that the Federal Reserve would continue lifting interest rates.

The euro, however, managed to claw back from early losses and ended at 10pm GMT unchanged from Thursday at US$1.1907. The US dollar was trading at ?119.00 against ?118.19 on Thursday.

The greenback was spurred ahead by news that the US economy created 243,000 non-farm payroll jobs last month, sharply higher than the 210,000 expected on Wall Street.

"The dollar rally after the non-farm payrolls report underscores the continued importance of labor market tightness with respect to interest rate expectations," Michael Woolfolk at Bank of New York said.

"Today's report reflects strong economic conditions that should fuel US economic growth back above trend during the first half, while the unemployment rate continues to fall," he added.

Analysts expect the Federal Reserve's benchmark Fed funds rate will hit its peak this year at 5 percent from 4.50 percent at present, starting with another quarter-point hike by the end of this month.

Elsewhere, the yen remained weak across the board as it continued to suffer from Thursday's decision by the Bank of Japan to end its ultra-easy monetary policy without raising interest rates.

There was disappointment on the market that the Bank of Japan was planning to keep interest rates at zero percent for the time being, meaning the yen will continue to be used as a funding currency in the short term.

In late New York trade, the dollar stood at 1.3174 Swiss francs from SF1.3139 on Thursday. The pound was being traded at US$1.7259 after US$1.7352 on Thursday.

The US dollar lost ground against the New Taiwan dollar on Friday, decreasing NT$0.01 to close at NT$32.513. The US currency opened at NT$32.575 and fluctuated between NT$32.500 and NT$32.595.

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