Dollar Resurrected On Jolt From Strong Jobs Report

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The dollar surged back to life on Friday after a relatively spectacular jobs report fueled speculation that the Federal Reserve can now begin to implement an exit strategy from accommodative measures designed to prop up the staggering economy.

The employment situation in the US has been dire since the onset of the worst financial crisis in decades, even as other parts of the economy have shown signs of coming around. With Friday's data suggesting the jobs market may be on the mend, the Fed may be compelled to lift interest rates from near zero sooner than previously imagined.

Employment was nearly unchanged in the month of November, according to the Labor Department. Non-farm payrolls edged down by 11,000 in November. Most economists had expected a decline of at least 100,000.

The unemployment rate also unexpectedly dipped to 10.0% from a 26-year high of 10.2%.

Not only did this month's report come in better than expected, revised figures for the previous couple months showed fewer job losses in October and September than initially reported.

The dollar rebounded dramatically versus the euro, jumping to 1.4880 after hovering around a 16-month low of 1.5143 overnight.

Also, with Japanese officials expected to boost measures designed to prop up their economy and devalue the yen, the dollar skyrocketed above Y90. A week ago, the dollar hit a 1995 low of 84.80 before finding its footing.

The buck pared its recent losses versus the sterling, bouncing back to 1.6500, an improvement of more than 2 cents from yesterday's low mark.

Gains were muted versus the loonie, as the Canadian employment picture also brightened significantly in November. The dollar moved back above C$1.0500 in choppy trading.

Canada's economy unexpectedly added 79,000 jobs last month, bringing the unemployment rate down 0.1% to 8.5%.

Back to the US, the Commerce Department reported that new orders for manufactured goods in the month of October increased for the sixth time in the past seven months amid an increase in orders for non-durable goods.

(Market News Provided by RTTNews)