Saturday, 3 October 2009

WORLD FOREX: Euro Climbs Above $1.46, Extending Recovery

WORLD FOREX: Euro Climbs Above $1.46, Extending Recovery

By Riva Froymovich
Of DOW JONES NEWSWIRES


NEW YORK (Dow Jones)--The euro recently climbed above $1.46, extending its recovery from an early morning selloff against the dollar.

The euro advanced to an intraday high of $1.4619, after earlier declining to more than a three-week low of $1.4480 on the release of a disappointing U.S. payrolls report.

Trading is often volatile following this highly anticipated monthly jobs data.

"It would be a mistake to take a logical look" on these moves, said Tom Fitzpatrick, global head of currency strategy at Citigroup.

"It's classic post-non-farm payrolls trading," he said. After the initial reaction, "people tend to say, 'Let's jump away to the sidelines,'" Fitzpatrick said.

The report also may add to skepticism on the dollar's prospects.

It recently fell to an intraday low against the yen, Y88.62.

Fitzpatrick added that this currency pair has been trading more closely with fixed-income markets lately, and long-end yields are down, putting pressure on the buck.

Separately, currency analysts cited a CNBC interview with Bill Gross, Pimco's co-chief investment officer. He said he thinks policymakers actually want a weak dollar, according to Reuters.

In recent trade Friday morning in New York, the euro was at $1.4611 from $1.4526 late Thursday, according to EBS via CQG. The dollar was at Y88.65 from Y89.77. The euro was at Y129.56 from Y130.39. The U.K. pound was at $1.5924 from $1.5940, while the dollar was at CHF1.0333 from CHF1.0420.

Employers eliminated 263,000 jobs in September, more than expected, as the unemployment rate climbed to 9.8%, the Labor Department said.

Economists surveyed by Dow Jones Newswires expected a 175,000 decrease.

-By Riva Froymovich, Dow Jones Newswires; 212-416-2217; riva.froymovich@dowjones.com

(Bradley Davis in New York contributed to this report.)

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(END) Dow Jones Newswires

October 02, 2009 10:06 ET (14:06 GMT)

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