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Dollar sustains fresh losses in wake of US job cuts

The US dollar sustained fresh losses on Friday in the wake of a government survey that showed US employers shed a surprisingly high number of jobs last month amid rising economic angst.

The US currency declined on foreign exchange markets after the US Labor Department said employers cut 80,000 jobs from nonfarm payrolls last month, marking the biggest drop in monthly employment losses in five years.

At 9pm GMT, the euro was swapping hands at US$1.5736, up from US$1.5682 in New York late on Thursday. On a weekly basis, however, the euro has lost some marginal ground to the dollar compared with US$1.5799 a week ago.

The US currency was meanwhile trading at ¥101.45, compared with ¥102.25 a day earlier.

Market participants said the employment had weighed on the dollar, especially as fears grow that the world’s largest economy could have fallen into a recession.

“This drop was greater than the market expected, but will only be the beginning of even steeper losses. The March payrolls number does not include the latest jump in jobless claims, which have hit recessionary levels,” said Kathy Lien, a chief strategist at Forex Capital Markets.

Traders said the dollar was bruised by the job losses because the US Labor Department report raised the odds that the Federal Reserve would continue its rate-cutting campaign.

Fed policymakers, led by Chairman Ben Bernanke, have slashed the federal funds short-term interest rate by three percent to 2.25 percent since September to shore up economic growth.

In late New York trading, the dollar was priced at 1.0058 Swiss francs, down from SF1.0102 on Thursday. The pound was being quoted at US$1.9930, compared with US$1.9966.
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