US employment bolstered in January
The unemployment rate in the United States dropped to a near three-year low in January, says a report that shows a stronger US economy.
The Australian dollar strengthened against the US dollar and hit a fresh record against the euro after a report showed employers in the world’s biggest economy added more jobs than forecast in January, boosting appetite for risky assets.
The Aussie reached a five-month high against the greenback, erasing earlier losses. It reached almost 82 euro cents, a record against the European currency. It was also buying 68.15 pence, trading at its highest level against the UK currency in about 27 years.
“Strong growth and still-low interest rates in the US are good for Aussie,” said Adam Carr, a senior economist in Sydney at ICAP Australia, a unit of the world’s biggest interdealer broker.
Australia’s dollar rose 0.6 per cent to $US1.0776 in New York and reached $US1.07778, the strongest level since August 4. The Aussie strengthened 1 per cent to 82.449 yen.
US nonfarm payrolls rose by 243,000, after a revised 203,000 gain in December, the Labor Department reported today in Washington. The median of 89 economists in a Bloomberg Survey had forecast an addition of 140,000. The unemployment rate fell to 8.3 per cent.
At a meeting last month, the Federal Reserve pledged to keep its interest rate near zero until late 2014. The accommodative policy tends to drive investors away from the US dollar as they seek higher yields elsewhere.
Greek rescue
The Aussie dollar earlier as concern mounted Greece is struggling to conclude a deal on a second international bailout. The rescue plan, which European officials and creditors say may be wrapped up in coming days, includes a loss of more than 70 per cent for debt investors in a voluntary exchange and loans likely to exceed the 130 billion euros now on the table.
The Australian dollar completed its seventh-straight week of gains, gaining 1 per cent against the greenback.
Bloomberg with BusinessDay
