US dollar climbs after jobs data report

New York

THE US dollar rebounded on Friday after US job growth for July helped ease some investor worries on the US labour market, but the currency logged a seventh straight week of declines.

The US Labor Department's report showed nonfarm payrolls increased by 1.76 million in July. While that was more than the 1.6 million economists surveyed by Reuters had forecast, it was still sharply lower than the record 4.8 million in June.

"The employment report allayed the market's downside job fears, allowing the dollar to rally broadly through the NY session," Ron Simpson, director of currency research at Action Economics in Tampa, Florida, wrote in a note following the data.

The dollar index, which measures the greenback against a basket of currencies, rose in the wake of the report and hit its highest in three days. It was last up 0.6 per cent at 93.410.

The US dollar index's rebound on Friday may not signal an end to its recent weakness, some analysts said.

Despite Friday's gains, the dollar index, which hit a two-year low on Thursday, was on pace to finish the week down 0.05 per cent. That is its seventh straight weekly loss, the longest such streak in a decade.

"One month's survey isn't going to be enough to meaningfully arrest the fall in the dollar," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

Investors also kept an eye on ongoing stimulus talks in Washington. US Republicans and Democrats have so far failed to reach an agreement on the cost of fiscal stimulus measures that many investors say is necessary to prevent the economy from losing more momentum.

The euro has retreated from recent highs, and was last down 0.8 per cent at US$1.1785, while the British pound fell 0.7 per cent to US$1.3057.

The risk-sensitive Australian dollar fell on concerns about worsening US-Chinese relations and the Reserve Bank of Australia's downbeat assessment of the local economy. It was last down 1.1 per cent at 0.7157. REUTERS

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