Signs of progress for Greece deal support euro By Sarah Turner and Deborah Levine, MarketWatch NEW YORK (MarketWatch) — The dollar turned back down against the euro and stayed under pressure against the Japanese yen on Friday after data showing the U.S. economy added far fewer jobs in May than economists expected added to concerns that the recovery is weakening. Also supporting the euro were leaks in media reports about a potential new aid package for Greece to prevent a near-term default or restructuring of its debt. The dollar index DXY -0.49% , which measures the greenback against a basket of six currencies, turned back down to 74.031, from 74.331 before the jobs data and 74.344 in late North American trading on Thursday. It fell to 74.143 just after the report. The euro EURUSD +0.62% rose to as high as $1.4585, a three-week high, then reverted to $1.4469, from $1.4490 before the report. Late Thursday, the euro bought $1.4484. Against the Japanese currency, the dollar USDYEN -0.54% bought 80.55 yen, down from ¥80.87 Thursday. The U.S. economy added 54,000 jobs in May, far fewer than the 125,000 expected by economists surveyed by MarketWatch. Read more on U.S. jobs growth. A shockingly weak ADP private employment report earlier this week had caused analysts and investors to lower their hopes for a solid nonfarm payrolls report. “The market has a sense that U.S. interest rates are going to be low and that hurts the dollar versus the euro,” said Jeff Young, head of North American foreign exchange research at Barclays Capital. The dollar briefly recovered against the euro just after the data sent stock futures sharply lower, driving traders back out of riskier assets to the relative safe haven of the U.S. currency. Read more on stocks. “The initial negative reaction in the Dow Jones futures once again supports safe-haven dollar buying with the euro looking toppish amidst Greece debt risk,” said Michael Woolfolk, senior currency strategist at Bank of New York Mellon. “Many traders [are] on edge that, even with the generous quantitative easing packages that are now coming to a close, the world’s largest economy has still failed to establish itself on a recovery track — something a shortfall in employment would simply serve to underline,” said IG Markets traders in a report before the payrolls data. Greek aid The euro also gained support amid more reports about progress towards another bailout package for Greece. Read story on Greek aid deal. “It looks like we’re going to get some kind fo second aid package for Greece that won’;t involve a credit event,” said Richard Franulovich, senior currency strategist at Westpac. “It kicks the can down the road and gives breathing space, which is all good for the euro.” Some hints of such a deal supported the euro Thursday. Also weighing on the dollar in the prior session, “comments from Moody’s that they could put the U.S. on possible review unless there are visible inroads for a solution on the debt ceiling were enough to see U.S. dollar bears return,” said the IG Markets traders. Read

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