MW: Dollar jumps vs. yen as payrolls top forecasts
Euro falls on talk majority of ECB policy makers open to rate cut
By William L. Watts, MarketWatch
FRANKFURT (MarketWatch) — The dollar extended modest gains versus major rivals and jumped versus the Japanese yen, after data showed the U.S. economy added more jobs than expected in November.
The ICE dollar index DXY +0.34% , which tracks the U.S. unit against a basket of six major rivals, rose to 80.531 versus a level of 80.250 in North American trade late Thursday.
The dollar traded at 82.74 Japanese yen USDJPY +0.23% , up from ÂĄ82.39 on Thursday and a similar level ahead of the payrolls release.
Payrolls provided a “good number,” but don’t necessarily leave the labor market in any stronger shape than was previously penciled in, said Jeremy Stretch, currency strategist at CIBC in London.
The Labor Department said 146,000 jobs were added in November, while the unemployment rate fell to 7.7% — the lowest since December 2008. See: U.S. creates 146,000 jobs in November .
Economists surveyed by MarketWatch had produced a consensus forecast for a rise of just 80,000 in November nonfarm payrolls, while the unemployment rate was expected to remain unchanged at 7.9%. Expectations were affected by uncertainty over the impact of Hurricane Sandy.
The rally versus the yen leaves the dollar battling stiff resistance in the ¥83.75 to ¥83.85 range that’s been difficult to overcome.
With payrolls out of the way, investor focus is likely to turn back toward negotiations on the so-called fiscal cliff, which remains the overarching macroeconomic theme for the dollar and other financial markets.
The dollar dipped toward ¥82.14 in earlier action as the yen strengthened in the wake of a 7.3 magnitude earthquake of the country’s northeast coast. See: Quake measuring 7.3 hits off northern Japan .
A subsequent tsunami warning was lifted. Yen crosses rebounded after it was clear the temblor was smaller and much less destructive than the massive quake that struck the country in March 2011, analysts said.
The euro EURUSD -0.51% changed hands at $1.2896, down from $1.2968, dipping below the $1.2900 level after a news report said a majority of European Central Bank policy makers were open to a rate cut. See: Majority of ECB council open to rate cut: report .
The euro saw selling pressure early Friday after the German Bundesbank slashed its 2013 forecast for the German economy. Read The Tell: Some bad news about that German growth engine .
The British pound GBPUSD -0.26% changed hands at $1.6017, down from $1.6055.
The Australian dollar AUDUSD -0.06% fetched $1.0475, little changed from $1.0478 late Thursday.
William L. Watts is MarketWatch's European bureau chief, based in Frankfurt. Follow him on Twitter @wlwatts.
