NEW YORK-The dollar climbed yesterday following a government report that gave investors hope of an improving job market.The Labour Department said the US unemployment rate fell to 9 per cent in January, the lowest level since April 2009.The report also showed that the economy added only 36,000 jobs in January, the smallest amount in four months.But economists mostly attributed that low figure to harsh winter weather, not a longer-term weakening of the job market.
A string of other economic reports have suggested the US economy is strengthening."People were willing to put an asterisk on this one," said UBS currency strategist Brian Kim in Stamford, Conn.The euro slid to $1.3587 late yesterday from $1.3639 late Thursday, retreating further from a three-month high of $1.3861 struck on Wednesday. Fears of a deepening European debt crisis had driven the euro lower since early November, but it has rebounded this year because of hopes of a stronger solution from European Union officials for debt problems.
But that hope may be fully reflected in the euro's value, and the currency could fade as people digest what officials have in store, Kim said.The euro had also been bid higher because of expectations that the European Central Bank would lift interest rates to counter inflation.ECB President Jean-Claude Trichet tamped down hopes of a rate hike any time soon on Thursday, however. Higher rates tend to support currencies.
After meeting with other EU officials Friday in Brussels, French President Nicolas Sarkozy and German Chancellor Angela Merkel said that the 17 countries that use the euro should decide by the end of March on a so-called "pact for competitiveness" that would possibly limit debt loads and raise retirement ages.In other trading Friday, the British pound dropped to $1.6098 from $1.6148, while the dollar rose to 82.24 Japanese yen from 81.63 yen.The dollar rose to 0.9555 Swiss franc from 0.9450 Swiss franc, but also fell to 98.81 Canadian cents from 99.02 Canadian cents. (AP)