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The dollar swung back and forth in wild trading on Friday following the release of a jobs report that had Wall Street on pins and needles for the better part of the week.
Traders hardly knew what to do once presented with data showing that US jobs losses continued to mount, driving the unemployment rate to its highest level in a quarter-century.
The dollar initially moved higher on risk aversion upon the release of the report, but quickly plunged versus the euro after traders realized the dismal jobs situation will keep the Federal Reserve from raising interest rates from near zero anytime soon.
The dollar fell back to 1.4600 versus the euro after hitting a 3-week high of 1.4480. With the loss, the buck stayed within 3 cents of its yearly low, set earlier this month.
The buck wound up little changed against the sterling, back near 1.5900.
Versus the yen, the dollar dropped to 88.61 before recovering to 89.60. The buck has found support since testing a 13-year low of 87.08 earlier in September.
Job losses in September were sharply higher than economists had expected, driving the unemployment rate to its highest level in 26 years and pushing the number of people out of work above 15 million.
The U.S. Labor Department revealed Friday that non-farm payrolls dropped 263,000 in September. Economists had expected a decline of 170,000 jobs, though some disappointing employment news over the last few days raised doubt about whether the result could meet expectations.
Boston Federal Reserve President Eric Rosengren said Friday that it is important that monetary and fiscal policy support the economy until it can be guaranteed that economic recovery can continue once such support is removed.
Speaking before the Greater Boston Chamber of Commerce, Rosengren warned that the economic recovery in the U.S. was fragile and could still possibly fall short of expectations.
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