Dollar falls upon disappointing job data

09:18, January 09, 2010      

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The dollar fell against major currencies on Friday as the U.S. nonfarm employment report was much weaker than expected.

Nonfarm payrolls fell 85,000 in December, according to the Labor Department. It has been widely expected that employment would be flat or just slightly lower. The unemployment rate was steady at 10.0 percent.

November's small job loss of 11,000 was revised to a small increase of 4,000. It was the first payroll growth in 2 years.

Job losses continued in construction and manufacturing in December, although the manufacturing losses are decelerating. The private service sector added jobs for the second month in a row. But firms are still being very cautious, because the biggest improvement in hiring is still in temporary workers.

However, the disappointing report for December doesn't alter the fact that the trend of job decline has fallen sharply. Average job losses contracted from 199,000 jobs per month in the third quarter to 69,000 jobs per month in the fourth.

"It is probable that we will see actual job gains, on average, during the first quarter," said analysts of IHS Global Insight.

Analysts of the Nomura Economic Research said they continue to believe that the trend in employment is improving and expect payroll growth to turn positive within the next two months.

The euro bought 1.4413 dollars in late New York trading compared with 1.4325 dollars it bought late Thursday. The pound rose to 1.6032 dollars from 1.5940 dollars.

The dollar fell to 1.0319 Canadian dollars from 1.0341 Canadian dollars, and fell to 1.0238 Swiss francs from 1.0331 Swiss francs. It fell to 92.64 Japanese yen from 93.26 Japanese yen.

Source: Xinhua
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