Sun, Feb 04, 2007 - Page 10 News List

US nonfarm payroll data boost dollar against rivals


The US dollar benefited from healthy US job numbers on Friday that reinforced the Federal Reserve's appraisal of solid growth combined with quiescent inflation, traders said.

By 10pm GMT, the euro had fallen under US$1.30 to trade at US$1.2963, against US$1.3022 late on Thursday in New York.

The US currency rose against the New Taiwan dollar on Friday, gaining NT$0.052 to close at NT$32.916. A total of US$802 million changed hands during the day's trading.

The US dollar opened at NT$32.885 and fluctuated between NT$32.744 and NT$32.960.

The greenback was trading at ¥121.07, against ¥120.77 on Thursday. The Japanese currency has been in focus ahead of a G7 meeting in Germany.

US employers added 111,000 jobs in January, according to the Labor Department's closely watched nonfarm payroll report. That was weaker than the 150,000 new jobs expected by Wall Street analysts.

But the agency revised upward its estimates for job creation in December to 206,000 from 167,000, and to 196,000 in November from 154,000. The unemployment rate rose to 4.6 percent from 4.5 percent in December, while average hourly wages, a key gauge of inflation, rose 0.2 percent in January to US$17.09.

Immediately after the announcement, the euro shot up to a four-week high of US$1.3064, while the pound briefly touched a nine-day high of US$1.9748.

But the US currency soon recovered much of those losses, as the headline readings were offset by the substantial revisions to back data.

"For the short-term traders looking for immediate gratification, the [payrolls] number was disappointing when set up next to the 150,000 print expected," John Kicklighter of Forex Capital Markets said.

"Alternatively, economists and position traders saw the number as proof positive that the stabilization the Fed has linked between employment and economic growth is genuine," he said.

"For both parties though, the upward revision to a five-month high 206,000 new hires was a considerable surprise and likely the shining statistic from the whole gauge," Kicklighter said.

Russell Bloom at Thomson IFR Markets agreed.

"The upward revision in December jobs was a bright spot in the data and some dollar bulls are taking heart," he said.

Beata Caranci, senior economist at TD Bank Financial Group, said the report was what Federal Reserve policymakers were looking for because it signals employment and income growth with little inflation pressure.

In other trading, the pound bought US$1.9664 at 8pm GMT, little changed from US$1.9668 late on Thursday. The dollar stood at 1.2475 Swiss francs from SF1.2433.

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