March 09, 2008	Sunday	Safar 30, 1429

NEW YORK, March 8: The dollar sank to a new low against euro Friday on dismal US jobs data but later clawed back losses after the Federal Reserve said it would pump more liquidity into the cash-strapped banking system.

The single European currency rose at one point Friday to a new peak of $1.5464 since its creation in 1999.

Around 2200 GMT, the euro was at $1.5359, down slightly from 1.5381 late Thursday in New York.

The dollar was at 102.67 yen, virtually unchanged from 102.64 on Thursday.

Earlier the greenback had fallen to 101.82 yen, its lowest level since January 2005.

The beleaguered greenback came under heavy selling pressure on news that a faltering US economy lost 63,000 jobs in February.

The Labour Department report showed the second straight month of losses in nonfarm payrolls, seen as one of the best indicators of economic momentum.

February’s loss was the biggest since March 2003, at the start of the war in Iraq, and a major disappointment for analysts expecting a gain of 25,000 jobs. For some, the report confirms the US is in recession.

For two months in a row, the US economy lost jobs. This is bad, but not as bad as will get in the coming months, said Kathy Lien, an analyst at Forex Capital Markets.

The Fed mounted a two-pronged offensive to combat a credit crunch as the US economy struggles with spiking foreclosures and fading consumer confidence, raising the specter of recession.

The central bank sharply hiked the amounts available this month to a combined $100 billion in its Term Auction Facility, a programme launched in December to relieve elevated pressure in the short-term, interbank funding market.

The Fed also said it was launching a series of term repurchase transactions that are expected to reach $100 billion.

Markets have been rattled this week by a barrage of bad news in the financial sector. Thornburg Mortgage, a leading home loan firm, said it was unable to pay debt and could face bankruptcy.

Buyout giant Carlyle Capital Corporation warned Friday that its liquidity “quickly” could evaporate because of additional repayment demands.

In late New York trade on Friday, the dollar was at 1.0247 Swiss francs, up from 1.0224 late Thursday. The pound firmed to $2.0153 from 2.0099—AFP