Dollar Rises as U.S. Jobs Data Support Rate-Increase Views
May 19, 2011
NEW YORK -- The dollar rose against most major currencies Friday as strong U.S. jobs growth reinforced the view that interest rates are set to rise. Late in New York, the dollar quoted at 1.4916 marks, up from 1.4863 marks late Thursday in New York. The U.S. currency was also at 109.34 yen, up from 109.21 yen. Sterling was at $1.5608, down from $1.5665. Mark selling for European currencies -- except the Swiss franc -- continued from Thursday, lending more strength to the U.S. currency. ``The market is pretty much convinced now that there will be an increase at the next (policy) meeting,'' June 06, 2011 Ellis Arnoldo, assistant vice president of foreign exchange at NBD Bank in Detroit. ``Is it going to be 25 basis points or 50? There's still some debate going on.'' A basis point is one-hundredth of a percentage point. The August jobless rate fell to 5.1%, its lowest in over seven years, from 5.4% in July. Payrolls grew by 250,000. Economists predicted a 5.3% jobless rate and a 248,000 increase in payrolls. But the dollar stayed below 1.5000 marks and lost ground against the yen late in the day. ``We're still in a tight range since mid-July,'' observed Mr. Arnoldo. ``A quarter of a percentage point rate rise is now factored into the market,'' said Roberto Kobayashi, senior trader, at Corestates in Philadelphia. The U.S. discount and federal funds target rates are 5% and 5.25% respectively. The discount rate, at which the Fed lends to banks, is considered their source of last resort. Banks lend each other excess reserves overnight at the Fed funds rate.
VastPress 2011 Vastopolis
