BLBG: Dollar Stays Higher as Jobs Increase in World’s Biggest Economy
The dollar remained higher versus the currencies of six U.S. major trading partners after U.S. employers added jobs in December at about the same pace as in November, fueling bets the world’s biggest economy is growing.
The Dollar Index increased for a third straight day. The greenback rose earlier against its major counterparts after minutes released yesterday of the Federal Reserve’s last meeting showed policy makers may end monthly bond purchases under quantitative easing this year.
“Labor markets are improving, but the pace of that improvement remains moderate,” said Vassili Serebriakov, a foreign-exchange strategist at BNP Paribas SA in New York.
The Dollar Index, which Intercontinental Exchange Inc. uses to track the U.S. currency, rose 0.3 percent to 80.643 at 8:49 a.m. in New York. It touched 80.868 earlier, the highest level since Nov. 22.
The U.S. currency pared gains versus the euro and yen. It was up 0.2 percent to $1.3024 per euro and gained 0.8 percent to 87.90 yen.
Payrolls rose by 155,000 workers last month following a revised 161,000 advance in November that was more than initially estimated, Labor Department figures showed today in Washington. The median estimate of 82 economists surveyed by Bloomberg called for an increase of 152,000. The unemployment rate held at 7.8 percent, matching the lowest since December 2008.
The Dollar Index (DXY) fell 1.2 percent on Aug. 3, when data showed employers added 163,000 jobs in July, exceeding a forecast of 100,000. It gained 0.2 percent Dec. 7 when data showed employment growth beat a 90,000-position estimate.
The benchmark gauge touched the highest level since August 2010 on June 1, when employers’ 69,000 new hirings in May failed to approach a Bloomberg survey forecast for 150,000.
Fiscal Cliff
The dollar reached a two-week low versus the euro on Jan. 2 as safety demand ebbed a day after Congress approved a bill that made automatic income-tax cuts from the George W. Bush era permanent for most workers while letting them expire for top earners.
The legislation broke a yearlong impasse over how to avert $600 billion in tax boosts and spending cuts, called the fiscal cliff, which were set to take effect at the start of this year.
The greenback gained yesterday versus most major peers as speculation that U.S. policy makers will struggle to reach agreement on raising the nation’s debt limit underpinned demand for safety.
The yen rose against the dollar amid concern the U.S. Treasury will exhaust what it called “extraordinary” measures to keep funding the government by February or March after the nation hit its $16.4 trillion debt ceiling Dec. 31.
Fed board members said they’ll probably end their $85 billion monthly bond purchases some time in 2013, according to minutes of their Dec. 11-12 meeting released yesterday.
To contact the reporter on this story: Joseph Ciolli in New York at jciolli@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
