Friday November 7, 2008 - 21:40:55 GMT
Share This Story
Reuters - www.reuters.com
FOREX NEWS-Dollar retreats vs euro after U.S. jobs gloom
* Dollar falls vs euro after U.S. sheds 240,000 jobs
* Dollar lifted vs yen as U.S. stocks shrug off jobs data
* Obama says facing economic challenge of a lifetime
* Obama says moving quickly on Cabinet appointments
(Updates prices, adds comment, changes byline)
By Steven C. Johnson
NEW YORK, Nov 7 (Reuters) - The dollar dipped against most
major currencies on Friday after data showed U.S. employers cut
240,000 jobs last month, pushing the jobless rate to a 14-year
high and adding more dark clouds to a gloomy economic horizon.
U.S. President-elect Barack Obama, in his first press
conference since winning the election, said the United States
was facing "the greatest economic challenge of our lifetime"
and called for a stimulus package "sooner rather than later."
Wall Street gained, however, after two straight days of
steep losses, helping lift the dollar against the yen and limit
its losses elsewhere. Analysts said that was partly because the
jobs data underscored what investors already know: the U.S.
labor market is under severe strain.
"The jobs number was bad, as expected, so we've seen some
dollar selling against the euro, but markets had already priced
in disaster," said Ken Landon, global currency strategist, at
JPMorgan Chase in New York. "So we're seeing a bit of risk
aversion coming off, with stocks higher."
The outlook for the U.S. and global economies, though,
remains a dreary one, and both the dollar and euro were set to
end the week down against the yen, a sign of risk aversion.
Central banks in Britain, the euro zone and Switzerland all
slashed interest rates this week, and analysts said Friday's
U.S. data showing 1.2 million jobs lost so far in 2008 suggests
the Federal Reserve may again cut its 1 percent benchmark rate
For more, see [nN07477175].
Late afternoon, the euro <EUR=> was up 0.5 percent against
the dollar at $1.2760, but was little changed on the week. The
euro rose 1 percent against the yen to 125.35 <EURJPY=>.
Sterling rose 0.4 percent to $1.5673 <GBP=>, while the
dollar added 0.5 percent to 98.230 yen <JPY=>.
For the week, the dollar was 0.4 percent weaker against the
Japanese currency, a sign that risk-averse investors continue
buying back yen that they had used to finance purchases of
higher-yield, higher-risk assets.
Friday's U.S. data fanned fear of a much deeper slowdown in
both the U.S. and global economies. Following the report, the
interest rate futures market had fully priced a quarter-point
cut in the Fed's benchmark interest rate in December and put
the odds of a half-point cut at better than around 64 percent.
Still, analysts are convinced the dollar will continue to
rally despite the data and increased odds of a rate cut.
That's because a worsening global economic outlook should
keep investors routing money back into safe-haven dollar assets
such as U.S. Treasury debt.
"The dollar is in this unusual spot of responding more to
the data's message for risk appetite than for Fed policy now
that dollar rates are approaching zero," said Alan Ruskin,
chief international strategist at RBS Global Banking and
Markets in Greenwich, Connecticut.
Some strategists said they were cheered by Obama, who said
he was moving quickly to fill Cabinet positions in his
Obama's comments sent "a strong message that he is already
on the job," said Greg Salvaggio, senior vice president for
capital markets at Tempus Consulting in Washington. "He is
showing he will be ready to hit the ground running."
(Additional reporting by Gertrude Chavez-Dreyfuss and
Vivianne Rodrigues in New York; Editing by Chizu Nomiyama)
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."