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Dollar Jumps After Reports Show Stronger Economy

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Posted by on Thursday, January 6, 2011, 10:57
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The dollar jumped against the euro, pound and yen Wednesday after reports on U.S. jobs and the service sector pointed to a strengthening U.S. economy.

Dollar Jumps After Reports Show Stronger Economy
Dollar Jumps After Reports Show Stronger Economy

The euro fell to $1.3151 in late trading in New York, skidding to its lowest level since Christmas, from $1.3305 late Tuesday. The British pound dropped to $1.5494 from $1.5583, while the dollar rose to its highest level against the Japanese yen since Dec. 22. It gained to 83.31 yen from 82.02 yen.

Payroll processor ADP reported that employers added 297,000 jobs last month, far more than the 100,000 gain economists had expected. That increased investor hopes that the U.S. government’s December jobs release on Friday will show lots of jobs created. Economists expect the Labor Department to say the economy added 145,000 jobs last month, and that the unemployment rate dipped back to 9.7 percent after rising to 9.8 percent during November.

The Institute for Supply Management, a trade group of purchasing executives, reported that a measure of the U.S. service sector, which employs about 80 percent of the work force, rose in December to its highest level since May 2006. The service sector includes shipping companies, financial institutions, restaurants and shops and hotels, among others.

The two reports are the latest signs that the country’s growth is accelerating.

In other trading late Wednesday, the dollar rose to 0.9671 Swiss franc from 0.9496 Swiss franc, but the U.S. currency dropped to 99.63 Canadian cents from 99.96 Canadian cents.

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