Greenback Rose on Employment Gains

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Tradervox.com (Dublin) - The greenback rose to its highest level in almost two months after labor department report showed the economy added more jobs than forecast last month. This has increased bets the Federal Reserve will reduce stimulus in the first quarter in 2014.The U.S. Dollar Index rose 0.5 percent to 1,021.66 at 5 p.m. in New York on Thursday. It touched 1,024.31, the highest since Sept. 13, as it breached 200-day and 100-day moving averages.

The dollar rose 0.4 percent to $1.3367 per euro after appreciating to $1.3296 on Nov. 7, the strongest level since Sept. 16. The euro added 0.6 percent to 132.42 yen. The greenback rose 1 percent to 99.05 yen.The euro has dropped 3.3 percent over the past two weeks, the biggest such slide since July 2012.

The dollar jumped as last month’s jobs increase beat all estimates in a survey of 91 economists, whose top prediction was a gain of 175,000 amid the disruption of the 16-day partial government shutdown that ended Oct. 17. The gains followed a revised 163,000 advance in September that was larger than initially estimated, Labor Department figures showed today in Washington. The jobless rate rose to 7.3 percent from an almost five-year low.

The Fed will maintain the level of purchases at $85 billion of bonds a month until March, according to the median estimate of 40 economists in a survey conducted Oct. 17-18. A survey in September forecast the first reduction would be in December.

Analysts pushed out their projections following the government shutdown, which they estimated reduced growth by 0.3 percentage point this quarter. The Fed’s next policy meeting is scheduled for Dec. 17-18.

The dollar rallied the most on an intraday basis against the euro since December 2011 yesterday after the European Central Bank cut its benchmark interest rate to a record low 0.25 percent as a drop in inflation to the slowest pace in four years threatened its mission to keep prices stable. The greenback extended gains after gross domestic product rose 2.8 percent on an annualized basis for the July to September period, topping the 2 percent forecast in a Bloomberg News survey, the Commerce Department said on Thursday.

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