Sun, May 06, 2007 - Page 10 News List

Dollar slips on disappointing US jobs report

AFP AND CNA , NEW YORK AND TAIPEI

The US dollar slipped against other major currencies on Friday on a weaker-than-expected US jobs report but analysts said the data was unlikely to spur a Federal Reserve interest rate cut next week.

The euro rose to US$1.3592 at 9pm GMT, from US$1.3549 in late trading on Thursday.

The dollar stood at ?120.11, compared with ?120.41.

US government figures showed just 88,000 new jobs were created last month, marking the weakest reading in almost two and a half years. Most analysts had forecast growth of at least 100,000 new positions last month.

The jobless rate ticked up to 4.5 percent from 4.4 percent.

The job snapshot came ahead of Wednesday's meeting of US Federal Reserve policymakers to deliberate interest rates, but several economists said they expected the Fed to keep rates unchanged next week.

The Fed's short term interest rate has been anchored at 5.25 percent since last June.

While job creation was lackluster, the April record still suggested the US economy was holding up.

Camilla Sutton, a currency analyst at Scotia Capital, said that US economic weakness continued to increase the odds of a sharper-than-expected Fed rate cut, creating an opportunity for dollar selling.

"We think there is room for more aggressive Fed cuts than the market is pricing as we move further into 2007," she said.

The currency market is waiting for the statement that will accompany the interest rate decision by Fed policymakers next week for clues to a possible move in June, notably in light of recent weak US growth data, benign core inflation and Friday's report revealing a sluggish labor market.

Elsewhere, the soft US data pushed the pound back above the US$1.99 level, with the currency set to remain in focus ahead of a fully expected interest rate hike to 5.5 percent by the Bank of England next week.

Markets will also be keeping an eye on developments in France, with the presidential election scheduled for today and in which a victory for favorite Nicolas Sarkozy is likely to support the euro.

The US dollar lost ground against the New Taiwan dollar on the Taipei Foreign Exchange on Friday, decreasing NT$0.001 to close at NT$33.280.

A total of US$923 million changed hands during the day's trading.

The US currency opened at NT$33.280 and fluctuated between NT$33.205 and NT$33.300.

In late New York trading, the US dollar stood at 1.2108 Swiss francs, compared with SF1.2158 late on Thursday.

The pound was traded at US$1.9931, up from US$1.9893.

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