Dollar turns broadly lower after disappointing U.S. jobs data

February 7, 2014

Frankfurt-Germany (Feb 7)  The dollar turned broadly lower against the other major currencies on Friday, as the release of disappointing U.S. nonfarm payrolls data sparked fresh concerns over the strength of the job market's recovery.

The dollar was lower against the euro, with EUR/USD up 0.11% to 1.3610.

The U.S. Labor Department said 113,000 jobs were added in January, less than the expected 185,000 increase. December's figure was revised up to a 75,000 rise from a previously estimated 74,000 increase.

The report also showed that 142,000 jobs were added in the U.S. private sector last month, compared to expectations for a 185,000 increase. In December, the number of jobs created in the private sector was revised up to 89,000 from a previously estimated 87,000.

The U.S. unemployment rate ticked down to 6.6% last month, from 6.7% in December. Analysts had expected the unemployment rate to remain unchanged in January.

The euro's gains were limited however, as official data earlier showed that German industrial production fell 0.6% in December, confounding expectations for a 0.5% increase, after an upwardly revised 2.4% gain the previous month.

A separate report showed that Germany's trade surplus narrowed to EUR18.5 billion in December, from EUR18.9 billion the previous month. Analysts had expected the trade surplus to narrow to EUR17.3 billion in December.

The pound rose against the dollar, with GBP/USD up 0.31% to 1.6374.

Official data earlier showed that U.K. manufacturing production rose 0.3% in December, less than the expected 0.6% increase. Manufacturing production in November was revised down to a 0.1% fall from a previously estimated flat reading.

A separate report showed that the U.K. trade deficit narrowed to GBP7.7 billion in December, compared to expectations for a deficit of GBP9.3 billion. The trade deficit in November was revised to GBP9.8 billion from a previously estimated deficit of GBP9.4 billion.

The dollar was little changed against the yen, with USD/JPY easing 0.01% to 102.10 and edged lower against the Swiss franc, with USD/CHF slipping 0.09% to 0.9001.

In Switzerland, official data showed that retail sales rose at an annualized rate of 2.3% in December, below expectations for a 3.9% increase, after a 4.2% year-on-year gain in November.

In addition, the Swiss National Bank said foreign currency reserves rose to CHF437.7 billion last month, from CHF435.2 billion in December.

The greenback was lower against the Australian, New Zealand and Canadian dollars, with AUD/USD gaining 0.34% to 0.8990, NZD/USD climbing 0.43% to 0.8283 and USD/CAD dropping 0.69% to 1.0992.

Official data showed that Canada's economy added 29,400 jobs last month, exceeding expectations for a 20,000 increase, after a 44,000 decline in December.

Canada's unemployment rate ticked down to 7.0% in January, from 7.2% the previous month, in line with expectations.

Earlier in the day, the Reserve Bank of Australia said in its quarterly monetary policy statement that "over the past few months, there have been further signs that very stimulatory monetary policy is working to support economic activity."

The central bank also raised its economic growth forecast, "primarily owing to the lower exchange rate, which is expected to boost exports and restrain imports."

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.18% to 80.83

(Source:  Reuters)


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