The dollar tumbled to an eight-month low against the yen and dropped versus the euro as a government report showed the world’s largest economy lost more jobs in July than economists forecast. “It solidifies the argument the U.S. is in a slowdown,” said Lauren Rosborough, a senior currency analyst at Westpac Banking Corp. in London. “The dollar’s on the back foot at least for the next couple of days.” Nonfarm payrolls lost 131,000 positions last month, Labor Department data showed today, compared with a drop of 65,000 forecast in a Bloomberg News survey of 84 economists. The economy shed a revised 221,000 jobs in June. Private payrolls that exclude government agencies rose by 71,000, less than forecast, after a gain of 31,000 in June that was smaller than first reported. The jobless rate held steady at 9.5 percent. The dollar fell 0.5 percent to $1.3252 per euro and dropped 0.7 percent to 85.24 yen at 8:53 a.m. in New York. It touched 85.14 yen, the lowest level since Nov. 27. The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six trading partners, fell for a second day. The measure declined on July 2, when the government reported a loss of jobs, and rose on June 4, when data showed a gain in May of 431,000 positions. The index was poised for a 0.8 percent drop on the week. The run of nine weekly losses would be the longest since Dec. 3, 2004. German, British Production Production in Germany fell 0.6 percent from May, when it rose a revised 2.9 percent, the ministry said. Economists in a Bloomberg survey had forecast a gain of 0.5 percent. U.K. industrial production, which includes utilities, mining and quarrying and accounts for 17 percent of the economy, declined 0.5 percent in June from the previous month, the Office for National Statistics said today. Economists predicted a 0.1 percent gain. European Central Bank President Jean-Claude Trichet said yesterday the region is recovering faster than forecast and money markets are improving, paving the way for the ECB to phase out liquidity tools used to fight the financial crisis. The greenback approached an eight-month low yesterday against the yen after Labor Department data showed the number of Americans filing for unemployment benefits last week unexpectedly increased. Initial jobless claims rose 19,000 to 479,000 in the week ended July 31, fueling speculation the Federal Reserve will discuss stimulus measures at its policy meeting next week. Nobel Prize-winning economist Joseph E. Stiglitz said the U.S. economic recovery is “anemic” and called for a second round of “better-designed” stimulus. “The recovery is so weak that it is not strong enough to generate new jobs for the new entrants in the labor force, let alone to find jobs for the 15 million Americans who would like a job and can’t get one,” Stiglitz told Bloomberg Television in an interview in Sydney yesterday.

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