NEW YORK, April 5: The dollar rose for a fourth straight day on Friday after dealers shrugged off a weak US jobs report and focused instead on signs of progress for US-led troops in Iraq.
The US Department of Labour reported that the number of Americans with jobs fell by 108,000 in March, more than three times the consensus forecast of a 29,000 decline.
It also revised the number of jobs lost in February to 357,00 from the 308,000 initially reported.
The market had anticipated that the data would be weak and by some measures it was weaker than expected, said Bob Lynch, currency strategist at BNP Paribas.
But the dollar right now is really about developments in the Iraq war rather than about reaffirmation that the economy is weak, which we already know, he said.
The payrolls report marked the end of a week chock full of dismal US economic data, none of which did much to dent the dollar’s rally.
It’s very noteworthy that over the last 48 hours that we’ve seen a plethora of bad US data and the dollar has not given up its recent gains, said Jordan Kotick, technical analyst at J.P. Morgan Chase in New York.
The market is attempting to price in, if not the end of the war, then American successes, and that is why it is buying the dollar and ignoring the data ... When the dollar has lost some steam, it has been choppy and anemic without any moxie, and that tells you something, he added.
In late New York trading, the dollar was at $1.0730 per euro up about a quarter percent on the day. Since Monday, when the dollar started to rebound, it has risen 1.7 per cent against the euro.
Against the Swiss franc, the dollar rose nearly half a percent to 1.3856 francs. It also rose against the yen by four-tenths of a per cent to 119.95 yen.
The unexpectedly rapid movement of US troops toward Baghdad this week, taking them to within a few miles of the capital on Friday, suggested to many investors that perhaps the war would not drag on as long as feared last week.
The market also paid little attention to an Iraqi television report in which Saddam Hussein referred to the downing of a US helicopter on March 24.
The market didn’t react much to the Saddam footage, said Ron Simpson, senior currency analyst at MMS International, who said trade was thin and choppy and dominated by short-term players.
People want to wait and see what happens in the so-called endgame in Baghdad and until then, many of them are sitting on their hands, he said.
Dealers said the dollar’s direction next week would be determined by events in Iraq.
The United States on Friday said hundreds of troops would reinforce Baghdad’s airport overnight after its forces wrested control of it from Iraqi troops.
Iraq said it may take non-conventional action Friday night - a threat that briefly pushed down the dollar - though it said it had no plans to use chemical or biological weapons.
On the economic front, both the Bank of Japan and the Bank of England hold policy-setting meetings next week. Japan is not expected to announce any major changes, and most economists expect British monetary authorities to stand pat on rates, despite some recent poor economic data.—Reuters