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Dollar weakens as nonfarm payrolls disappoint

Published 11/07/2014, 08:45 AM
Dollar loses ground vs. rivals after U.S. jobs report
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Investing.com - The dollar weakened against a basket of other major currencies on Friday, as data showed that the U.S. economy added less jobs than expected last month, fuelling fresh uncertainty over the strength of the job market.

In a report, the Department of Labor said the U.S. economy added 214,000 jobs last month, disappointing expectations for an increase of 231,000. The number of jobs added in September was revised to 256,000 from a previously estimated 248,000.

The report also showed that the U.S. unemployment rate ticked down to 5.8% in October from 5.9% in September. Analysts had expected the unemployment rate to remain unchanged last month.

The euro pulled away from a two-year low, with EUR/USD rising 0.35% to 1.2415.

The euro came under pressure earlier, after European Central Bank President Mario Draghi said on Thursday that the ECB would soon begin purchasing asset-backed securities to prop up the economy.

The program will run for two years and have a "sizeable impact" on the ECB’s balance sheet, Draghi said.

He added that the governing council is unanimously committed to taking further "timely measures" if needed, which sent the euro dropping.

Earlier Friday, official data showed that French industrial production was flat in September, compared to expectations for a 0.2% fall, after a 0.2% decline the previous month.

The pound held steady, 14-month lows with GBP/USD trading at 1.5833.

In a report, the Office for National Statistics said the U.K. trade deficit widened to £9.82 billion in September from £8.95 billion in August, whose figure was revised from a previously estimated deficit of £9.10 billion.

Analysts had expected the trade deficit to widen to £9.40 billion in September.

The yen and the Swiss franc were higher, with USD/JPY slipping 0.19% to 115.01 and with USD/CHF shedding 0.27% at 0.9708.

In Switzerland, official data earlier showed that retail sales rose at an annualized rate of 0.3% in September, disappointing expectations for a 1.0% increase. Retail sales for August were revised to a 1.4% gain from a previously estimated 1.9% rise.

Elsewhere, the commodity linked dollars were broadly stronger. AUD/USD rose 0.37% to 0.8588 after the Reserve Bank of Australia said borrowing costs will remain low for an extended period of time.

Meanwhile, NZD/USD gained 0.33% to 0.7718 and USD/CAD declined 0.74% to 1.1341 after Statistics Canada reported that the number of employed people rose by 43,100 last month, confounding expectations for a 5,000 decline, after an increase of 74,100 in September.

Canada's unemployment rate fell to 6.5% in October from 6.8% in September. Analysts had expected the unemployment rate to remain unchanged last month.

The U.S. dollar index, which tracks the performance of the greenback against a basket of six major currencies, was down 0.14% at 88.09, below the four-and-a-half year high hit earlier in the session.

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