BLBG: Dollar Rises Against Yen as U.S. Jobs Losses Are Near Forecast
The dollar rose against the yen as a government report showed U.S. job losses last month were near what economists forecast.
The yen was headed for a weekly decline against all of the other major currencies on reduced demand for safety after the Group of 20 pledged yesterday to triple the money the International Monetary Fund can lend to rescue crisis-stricken nations to $750 billion.
“My take is no surprise, no problem,” said Mike Moran, a senior currency strategist at Standard Chartered in New York. “The number is right on the money. The fact that there’s no unexpected deterioration leads back to the mindset we had, which is getting back to risk.”
The dollar gained 0.4 percent to 99.89 yen at 8:55 a.m. in New York, from 99.52 yesterday. It touched 100.27, the highest level since Nov. 4. The U.S. currency strengthened 0.5 percent to $1.3397 per euro from $1.3461. The euro traded at 133.80 yen, compared with 133.98.
Employers eliminated 663,000 jobs last month, following a reduction of 651,000 in February, the Labor Department reported today in Washington. The median forecast of 80 economists surveyed by Bloomberg News was for a drop of 660,000. The jobless rate increased to 8.5 percent, meeting the median forecast of economists.
The Dollar Index, which the ICE uses to track the greenback’s performance against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona, was little changed at 84.41 today. It increased 5.1 percent in the first three months of 2009, a fourth consecutive quarterly gain.
Jobless Benefits
The number of Americans seeking jobless benefits last week climbed to the highest level in 26 years. Initial jobless claims swelled to 669,000 in the week ended March 28, the Labor Department said yesterday.
The dollar depreciated 0.9 percent versus the euro on March 6, when the Labor Department’s payroll report for February indicated job losses slowed, reducing demand for safety.
The G-20 turned yesterday to the Washington-based IMF to prevent the worst financial crisis since the Great Depression from swamping more developing nations. G-20 leaders gave approval in London for the IMF to raise $250 billion by issuing Special Drawing Rights, or SDRs, the artificial currency the IMF uses to settle accounts among member nations.
The pound gained versus the euro today as Markit Economics said an index based on a survey of about 700 services companies by the Chartered Institute of Purchasing and Supply rose to a six-month high in March. Sterling increased 0.9 percent to 90.62 pence per euro.
ECB’s Decision
The euro rose yesterday against the dollar after the European Central Bank cut the main refinancing rate less than economists forecast and deferred a decision on what other tools it can use to rescue its ailing economy. The ECB lowered its benchmark rate by a quarter-percentage point to 1.25 percent, less than the half-point reduction forecast by 49 of 55 economists in a Bloomberg survey.
“Longer term, this is probably euro-negative as it confirms that the ECB is behind the curve,” said Jeremy Stretch, a senior currency strategist in London at Rabobank International, the biggest Dutch mortgage lender. The euro’s gain yesterday was a “knee-jerk reaction,” and the common currency may drop to $1.23 and 87 pence in six months, according to Stretch.
