The dollar rose to a one-month high against the euro as a
government report showed employers in the U.S. eliminated fewer jobs
last month than analysts forecast.
The euro weakened as German retail sales dropped in June more than
twice as much as forecast, undermining the case for the European
Central Bank to boost interest rates again this year. The pound headed
for its biggest weekly drop since mid- June as U.K. manufacturing
shrank by the most in a decade.
``The labor market is weak, but the pace of job erosion is slowing
down,'' said Mike Moran, a senior currency strategist at Standard
Chartered in New York. ``Europe is catching up with where the U.S. has
been. It does put a floor under the dollar.''
U.S. payrolls shrank in July for a seventh straight month, decreasing
by 51,000, matching the previous month's decline, the Labor Department
said today in Washington. The median forecast of 79 economists was for
a reduction of 75,000. The unemployment rate rose to 5.7 percent, the
highest since March 2004, from 5.5 percent.
The dollar pared its gain versus the euro as crude oil rose as much as
3.6 percent to $128.60 a barrel. Israeli Deputy Prime Minister Shaul
Mofaz said Iran, OPEC's second-largest oil producer, is on a path
toward a ``major breakthrough'' in its nuclear program.
The yen rose to a two-week high against the euro as slowing global
growth prompted traders to pare holdings of higher- yielding assets
funded in Japan.