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Greenback rallies on jobs news

The dollar rallied against its main rivals on Friday after a better-than-expected report on US jobs growth was reinforced by comments by US Secretary of the Treasury Henry Paulson supporting the greenback.

The euro fell to US$1.3200 at 2200 GMT from US$1.3280 in New York late on Thursday.

The dollar rose to ?116.33 from ?115.26 late on Thursday.

Paulson reaffirmed his support for a strong dollar despite the greenback's steep decline on currency markets of late.

"I believe very strongly that a strong dollar is in our nation's best interest, and I feel very good about the strength of our economy right now," he said in an interview with the financial news network CNBC.

The dollar has recovered some ground since hitting 20-month lows against the euro and a 14-year low against the British pound this week on concerns about the extent of the US economic slowdown.

Earlier on Friday, the market had focused on data from the US Labor Department which showed US non-farm payrolls rising by 132,000 last month, above market expectations for a gain of around 105,000.

Revisions to back data were broadly positive, with October's payrolls revised down to show a gain of 79,000 from the previous estimate of 92,000, but September's reading was revised up substantially to 203,000 from 148,000.

Paulson called the payrolls report "very, very good news," noting that the US economy has now added about 7 million jobs since August 2003.

He added "that we are also seeing this job creation starting to translate into real wage growth for the average working family in America", but played down the impact on inflation.

Analyst John Kicklighter at Forex Capital Markets said there was a hesitant move upward by the dollar that gathered momentum after Paulson's comments.

"The bulls were finally able to rally their disjointed ranks and drive the dollar on a stellar rebound," Kicklighter said.

The US dollar rose against the new Taiwan dollar on the Taipei Foreign Exchange on Friday, gaining NT$0.09 to close at NT$32.390.
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