June 07, 2008	Saturday	Jamadi-us-Sani 02, 1429

LONDON, June 6: The dollar was driven lower on Friday on dismal US labour market news that raised fresh concerns about the health of the world’s largest economy and dampened prospects for a hike in US interest rates.

The single European currency in late-day trade had risen to $1.5730 from $1.5590 late Thursday in New York.

The dollar was meanwhile trading at 105.35 yen, down from 105.93 on Thursday.

The much awaited US employment report showed the jobless rate surging to 5.5 per cent in May from 5.0 per cent reported in April, its strongest rise in 22 years and sharply higher than the 5.1 per cent rate expected by many analysts.

The US economy shed 49,000 jobs in May, the fifth straight monthly decline, although smaller than the expected 60,000 loss.

The stark increase in the jobless figures made it more likely the Federal Reserve would forego hiking US interest rates which would boost the dollar in the near future despite building inflationary pressures from spiralling energy and food prices, analysts said.

Robert MacIntosh at Eaton Vance said the market expected the Fed to tighten monetary policy by half a point by the end of the year, probably beginning in the fall.

But the May unemployment report makes it more likely the Fed will “do nothing for longer.”—AFP