ECB's Trichet calls current euro-zone rates appropriate for economic climate NEW YORK (MarketWatch) -- The dollar traded mixed Thursday, falling against Japan's yen but pulling higher against the euro, after the U.S. government reported more job losses than expected in June and the European Central Bank said it would hold interest rates at current record-low levels. CUR_EURUSD 1.40, -0.01, -0.91% 1.501.401.301.20 09FMAMJ The Labor Department said nonfarm payrolls contracted by 467,000 last month, more than the 325,000 drop expected by economists surveyed by MarketWatch. The nation's unemployment rate rose to 9.5%, less than the anticipated 9.6%. Read full story. Market participants also reacted to the European Central Bank's latest policy meeting in Luxembourg. The ECB left unchanged its key lending rate, as expected. See details. At his monthly news conference, ECB President Jean-Claude Trichet said the rates remain "appropriate" in light of recent economic data. U.S. stocks fell sharply at the open on Wall Street, as investors registered their displeasure with the step backward taken by the employment market. "The dollar is mixed after the data. We saw the euro slip a little bit on Moody's downgrade of Ireland," said Ronald Simpson, managing director, global currency analyst, Action Economics. See Ireland credit-rating downgrade. The dollar came under pressure against the yen, a scenario replayed during the past few months. "It started under the guise of safe-haven flows, when stocks fall, the market would pile into the dollar. The relationship is more related to the Treasury market -- you buy dollars and pour into short-term Treasurys, which are considered safe," said Simpson. See Bond Report. $DXY 80.13, +0.49, +0.62% 90858075 09FMAMJ The dollar index (DXY 80.13, +0.49, +0.62%) , a measure of the greenback against a trade-weighted basket of currencies, stood at 80.104, up from 79.619 in North American trading Wednesday afternoon. The dollar traded at 96.06 yen, little changed from 96.59 yen on Wednesday. The euro bought $1.4046, slipping from $1.4156. The unemployment rate in the 16-nation euro zone jumped to 9.5% in May, the highest level in 10 years, the statistics agency Eurostat reported Thursday. Currency markets were unmoved in the aftermath, however. See euro-zone joblessless story. 1201101009080 09SNFAJ A Chinese official reiterated the nation's call for a stable dollar and a diversification of reserve currencies Thursday, reports said, but the currency market reaction was muted. China hopes for diversification of the international currency system in the future, and this topic could be addressed at next week's Group of Eight leaders' summit next week in Italy, Chinese Vice Foreign Minister He Yafei said. See full story on He's comments. The Swedish krona tumbled versus the euro after Sweden's central bank surprised markets with a quarter-point cut in its official interest rate to 0.25%. The krona traded at 10.7825 per euro, down 0.6%. The euro posted a modest spike versus the Swiss franc after news reports said Swiss National Bank directorate member Thomas Jordan reiterated the central bank's willingness to intervene in foreign exchange markets to halt an appreciation of the Swiss currency. Traders have reported instances over recent months of the SNB intervening to sell francs and buy euros. The euro jumped from around 1.52 francs to above 1.5240 francs following the remarks, and remained 0.2% higher at 1.5238 francs in more recent action.

Source