Jobs report helps lift dollar versus yen

NEW YORK - The U.S. dollar rose versus the yen on Friday as a report showing deterioration in the U.S. labor market boosted investors’ expectations for further government intervention to stimulate the economy.



By (Reuters)

Published: Fri 6 Feb 2009, 10:28 PM

Last updated: Thu 2 Apr 2015, 3:54 AM

U.S stocks also rose after the Labor Department said employers slashed 598,000 jobs in January, the deepest cut in payrolls in 34 years.

The dismal figures may provide an incentive for U.S. legislators to support the Obama administration’s fiscal stimulus program and its bank rescue plan, which will be unveiled Monday, traders said.

“Looking beyond today’s terrible figures, everybody now expects the President’s rescue plan to pass and pass fast,” said Gregory Salvaggio, a vice president for trading at Tempus Consulting in Washington. “That is helping lift stocks and is taking some risk off the table, which in turn leads the market to sell yen and buy back some dollars.”

In mid morning trading in New York, the dollar was 0.6 percent higher at 91.67 yen. The euro was up 0.5 percent on the day at $1.2848.

“Everyone was expecting a lousy number, we knew it would be bad and is going to get worse. But right now, investors are looking for the next big thing—fiscal stimulus and a banking rescue,” said Brian Dolan, chief currency strategist at Forex.com, in Bedminster, New Jersey.

The U.S. Senate will try again on Friday to pass the $937 billion stimulus package aimed at boosting the battered economy.

President Obama said the package was needed urgently to stave off “catastrophe.”

High-yielders

Rising equities suggested a slight improvement in appetite for risk, which also helped higher-yielding currencies including the Australian and New Zealand dollars, while the yen and the Swiss franc remained under pressure.

Sterling jumped earlier to a two-month high against the euro on Friday, gaining from a growing view that UK interest rates are near their trough compared with the euro zone. The euro was last down 0.3 percent at 87.67 pence.

The Bank of England cut interest rates to a record low of 1 percent on Thursday while the European Central Bank left rates steady.


More news from Business
Luxury vrooms again

Business

Luxury vrooms again

This year the #NoFilterDXB witnessed a dazzling array of replica vehicles from some of Hollywood’s most classic movies and TV shows.

Business2 days ago