Dollar rises ahead of U.S. nonfarm payroll data

09:22, January 08, 2010      

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The U.S. dollar rose against major currencies on Thursday as investors are waiting for the U.S. nonfarm employment report of December to be released on Friday.

It was widely expected that the report will be encouraging, with employment flat or just slightly lower than a month ago. Some analysts forecast a small increase which would be the first growth in 2 years.

The surprisingly small 11,000 drop in nonfarm payrolls in November, combined with substantial upward revisions to the two prior months, suggested that labor market conditions were closer to a turning point than previously thought, said analysts of Nomura Economic Research.

U.S. initial jobless claims stood at 434,000 last week, the Labor Department reported on Thursday. It was slightly higher than the previous week but lower than expected. The four-week moving average of initial claims and continuing jobless claims both fell, indicating further improvements in the labor market.

The volume of retail trade fell by 1.2 percent month-to-month in the eurozone, according to Eurostat, the statistical office of the European Union. The retail sales index decreased by 4.0 percent compared with November 2008.

German industrial orders rose 0.2 percent in November, less than a 1.4-percent rise that analysts had forecast, the German Economics Ministry reported.

The reports suggested a weak, slow recovery in eurozone, driving European currencies lower.

The yen fell against the dollar after Japan's new Finance Minister Naoto Kan said on his first day in office that he would welcome a weaker currency. Kan said he would work closely with the Bank of Japan to steer the currency toward an "appropriate" level around 95 yen to the dollar.

The euro bought 1.4325 dollars in late New York trading compared with 1.4415 dollars it bought late Wednesday. The pound fell to 1.5940 dollars from 1.5997 dollars.

The dollar rose to 1.0341 Canadian dollars from 1.0328 Canadian dollars, and rose to 1.0331 Swiss francs from 1.0281 Swiss francs. It rose to 93.26 Japanese yen from 92.40 Japanese yen.

Source: Xinhua
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