Dollar drops

    225

    NEW YORK- The dollar lost out to the euro after US jobs report suggested that some traders may have over-played a stronger American recovery from the coronavirus pandemic.

    The euro rose 0.7 percent to $1.2042 in its biggest daily gain in more than two months after the report, which Marc Chandler, strategist at Bannockburn Global Forex, said did more to force short-term traders to adjust long-dollar and short-euro positions than it changed the economic outlook for a US recovery that is stronger than peers.

    The dollar index of a basket of currencies was down 0.5 percent at 91.028, but still holding a weekly gain of 0.6 percent.

    “This forces some of the late dollar-longs out,” Chandler said. “It doesn’t really change what to expect for Q1 GDP in the US Market positioning is a different story.”

    The report showed US employment growth rebounded less than expected in January and job losses the prior month were deeper than initially thought, strengthening the argument for additional relief money to aid the recovery from the COVID-19 pandemic.

    The greenback was off 0.1 percent against the yen at 105.42.

    The more modest change against the yen, Chandler said, was consistent with yields on longer-term US Treasuries edging up in reaction to the report and the support it gives for additional government spending to stimulate the economy.

    The spread between yields on two-year and 10-year Treasuries, seen as an indicator of economic expectations, widened to as much as 106 basis points and the most since May 2017.

    US President Joe Biden cited the report as he and his Democratic allies pushed ahead with steps toward their $1.9 billion COVID-19 relief package, including a vote in the Senate and another expected in the House. The moves aim to secure the spending before special unemployment benefits expire on March 15.

    Expectations for more stimulus also drove global stocks to a new record on Friday, as measured by MSCI’s all-country world index.