As dollar falls, job loss up

Published: Friday, April 1, 2005 at 6:01 a.m.
Last Modified: Thursday, March 31, 2005 at 11:38 p.m.
FRANKFURT, Germany - The U.S. dollar fell against the euro and other currencies Thursday as the United States reported a rise in weekly jobless claims.
The euro bought $1.2958 in late New York trading, up from $1.2923 late Wednesday. The British pound rose to $1.8898 from $1.8788.
The dollar also fell to 107.18 Japanese yen from 107.53, 1.1960 Swiss francs from 1.1984, and 1.2092 Canadian dollars from 1.2169.
The U.S. Labor Department said Thursday that the number of Americans filing new claims for unemployment benefits rose by 20,000 to 350,000 last week. It was the highest level in 11 weeks. Separate data showed that Americans' incomes rose by 0.3 percent in February, while consumer spending climbed by 0.5 percent.
The dollar already had been drifting downward amid expectations it won't get much more of a boost from Friday's release of key U.S. and Japanese economic data.
On Friday, the Japanese central bank will release the results of its quarterly business sentiment survey. Later in the day, the United States will give payrolls data for March.
The report from Japan is expected to give a weak reading, which tends to push the dollar higher because of pessimism about the Japanese economy.
U.S. non-farm payrolls are expected to have increased by 225,000 in March, after the economy created 262,000 new jobs in the previous month. Optimism about the U.S. economy tends to push the dollar higher.
Worries about the wide U.S. trade and budget deficits sent the euro surging to an all-time high of $1.3667 at the end of December. While those concerns remain, the dollar has stabilized this year.
The currency enjoyed a rebound last week after the U.S. Federal Reserve boosted interest rates by a quarter point and issued a hawkish statement on stronger inflationary pressures.
The Fed is expected to raise rates further throughout the year.
Higher U.S. interest rates tend to help the dollar by making assets denominated in the currency more attractive to investors.

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