By Deborah Levine and William L. Watts, MarketWatch
NEW YORK (MarketWatch) — The dollar pared declines against major currencies on Friday after the U.S. reported that the economy added more jobs in July than analysts’ anticipated, offering some relief to worries that the recovery seemed to be faltering.
The U.S. dollar index DXY -0.55% , which measures the greenback’s performance against a basket of six currencies, retraced losses to 74.919, from 74.925 before the data and versus 75.015 in late North American trading on Thursday.
The euro EURUSD +0.84% traded to $1.4169, compared to $1.4184 prior to the report and up from $1.4134 Thursday.
Against the Japanese yen, the greenback USDJPY -0.25% bought ¥78.74, up a little from before the report but still down from ¥79.02 late Thursday, after Japan intervened in currency markets. It’s still higher than Wednesday’s level of ¥76.96.
The British pound GBPUSD +0.38% rose to $1.6308, from $1.6283 late Thursday.
Against the Swiss franc — the other safe-haven currency that’s gained tremendously — the dollar USDCHF +0.42% rose 0.4%, buying 76.70 centimes. A Swiss franc equals 100 centimes.
The dollar improved after the Labor Department said the United States added 117,000 jobs in July and the unemployment rate fell slightly to 9.1%. Read about U.S. payrolls.
“The key takeaway from nonfarm payrolls is that double-dip fears abate,” said Boris Schlossberg , director of currency research at GFT. “That should help the dollar stabilize against the Swiss franc and Japanese yen.
Global turmoil
Gains by the dollar may be limited after a week of intense global-market turmoil and intervention in currency markets by Japan and Switzerland to weaken their currencies, which have become the safe havens of choice.
The high level of bearishness and dysfunction gripping markets makes it “hard to believe a single data point can do much more than squeeze out some shorts,” said Elsa Lignos, senior currency strategist at RBC Capital Markets in London, before the payrolls report.
Also helping the euro before the U.S. data, pressure on Italian and Spanish bonds eased Friday as the ECB reportedly engaged in a further round of purchases of Portuguese and Irish debt and investors awaited U.S. payrolls figures. See related analysis of the ECB’s intervention efforts .
But strategists continued to question whether the ECB has the will or the firepower to curb a rise in Italian and Spanish bonds that has raised alarms over the spread of the region’s sovereign crisis and contributed to global market turmoil.
In a news conference in Brussels, Olli Rehn, the European Union’s commissioner for economic affairs, said officials would work to speed the implementation of the plan to strengthen the region’s rescue mechanism. He described spreading market turmoil in Europe as unjustified by fundamentals and said rising Italian and Spanish bond yields were “incomprehensible.”
Deborah Levine is a MarketWatch reporter, based in New York.
William L. Watts is a reporter for MarketWatch in Frankfurt. Varahabhotla Phani Kumar in Hong Kong contributed to this report.
