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Forex - Dollar plummets as U.S. jobs report for August disappoints

Published 09/07/2012, 02:58 PM
Updated 09/07/2012, 02:58 PM

Investing.com - The dollar tanked against most major global currencies on Friday after the U.S. government reported the economy added far less jobs than expected in August.
 
In U.S. trading on Friday, EUR/USD was up 1.31% at 1.2797.

The Bureau of Labor Statistics reported earlier that the U.S. economy created a net 96,000 nonfarm payroll jobs in August, well below market calls for 125,000 jobs.

The jobs report quickly fueled already growing sentiment that the Federal Reserve will roll out a third round of quantitative easing, possibly at its Sept. 12-13 monetary policy meeting.

Under quantitative easing, the Fed buys assets such as Treasury holdings or mortgage-backed securities held by banks, pumping the economy full of fresh liquidity in a way that pushes down interest rates to encourage investing and hiring.

Such accommodative policies tend to weaken the dollar by design.

The Bureau of Labor Statistics added that July's figures were revised down to 141,000 from 163,000, while June's figures were revised down to 45,000 from 64,000, further stoking market calls for Fed intervention.

The unemployment rate stood at 8.1% in August, down from 8.3% in July as more jobless workers exited the labor force.

The dollar was down against the yen, with USD/JPY trading down 0.75% at 78.27, and down against the Swiss franc, with USD/CHF trading down 0.83% at 0.9458.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.48% at 0.9780, AUD/USD up 1.11% at 1.0399 and NZD/USD up 1.35% at 0.8122.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 1.08% at 80.24.








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