RTRS: FOREX-Dollar falls vs yen, euro after U.S. payrolls data
By Steven C. Johnson
NEW YORK, Aug 6 (Reuters) - The dollar hit an eight-month low against the yen on Friday and fell against the euro after data showed the United States shed twice as many jobs in July as economists had expected, adding to worries about recovery.
While U.S. employers did add 71,000 private sector jobs, that, too, frustrated investors who were betting on a 90,000 gain, and helped push the euro EUR= to a three-month high of $1.3267. The dollar fell to 85.15 yen, its lowest since November and not far from a 15-year low beneath 85.
For more on the data, please see [ID:nN06202981].
The jobs report "is really going to deepen concerns about the health of the labor market, and that increases the odds of the Federal Reserve having to implement fresh stimulus measures to jump start the recovery," said Joe Manimbo, analyst at Travelex Global Business Payments in Washington. "Nothing in there to argue for a firmer dollar."
The data also drove two-year Treasury US2YT=RR yields to the latest in a string of record lows, further undermining the dollar's yield appeal, and hit U.S. stock futures.
A string of weak U.S. data fed speculation this week that the Federal Reserve could resort to renewed buying of Treasury and mortgage bonds to provide a jolt to the U.S. economy.
Marcus Hettinger, global currency strategist at Credit Suisse in Zurich, said a weak dollar heading into next week's Fed monetary policy meeting will only raise speculation of more action from the U.S. central bank.
The dollar was last at 85.19 yen JPY=, its lowest since November. It was also near a 15-year low of 84.81 yen and its all time trough around 79 yen.
Sterling GBP= rose 0.2 percent to $1.5939, near a six-month peak.
Traders said a dollar move below 85 yen could increase volatility, as it would likely bring more attempts by Japanese officials to talk down the yen.
Though several lawmakers have warned that action may be warranted to weaken the yen and restore Japanese trade competitiveness, analysts think it would take an extremely rapid rise to trigger outright intervention.
The Canadian dollar fell CAD=D4 after data showed Canada's economy shed 9,300 jobs in July, compared to forecasts for a 15,000 gain. [ID:nSCL6JE64E] (Additional reporting by Nick Olivari in New York and Naomi Tajitsu in London; Editing by James Dalgleish)
