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The dollar weakened in topsy turvy trading on Friday, a fitting end to a choppy week characterized by uncertainty about the prospects of a genuine global economic recovery.
As stocks go, safe haven dollar has run the opposite way, and today was no exception that rule. Wall Street stocks rallied, fueling risk aversion and renewing interest in higher yielding currencies.
The dollar gave back its early gains versus the euro and sterling, and suffered big losses against its Canadian counterpart.
Traders were presented with a mixed jobs report for the month of August from Labor Department. The data showed a continued slowdown in the pace of job losses but a bigger than expected increase in the unemployment rate, which jumped to a 26-year high.
Chris Low, chief economist for FTN Financial, noted, "The unemployment rate is a lagging indicator which is likely to continue to rise for a few months even after payroll growth resumes."
The dollar swung wildly versus the yen immediately after the jobs report, but ended the session only slightly changed near 93.
The dollar continued to bounce back and forth versus the euro, slipping a penny from its early highs to 1.4300. A month ago, the dollar hit a 2009 low of 1.4446 but has since fallen no further.
Against the sterling, the dollar slipped to 1.6410, staying away from a 7-week high of 1.6113 set a few days ago.
At the same time, the dollar came under heavy pressure against the loonie, slipping to C$1.0850.
Canadian employment increased by 27,000 in August, led by part-time work and among private sector employees, Statistics Canada said Friday. The unemployment rate edged up 0.1 percentage points to 8.7% as more people participated in the labor market.
Businesses hired more than they fired for the first time in 11 months.
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