The dollar dropped for the first time in three days against the euro as the U.S. unemployment rate climbed to the highest level since 1994, indicating the financial crisis is taking a sustained toll.
The yen fell against the euro, the dollar, the Australian dollar and New Zealand's currency as a rally in global stocks on the prospect of further interest-rate cuts by the Federal Reserve encouraged investors to buy higher-yielding assets financed by low-cost loans in Japan.
The yen depreciated against the Aussie and versus New Zealand's dollar as stock gains boosted carry trades, in which investors get funds in a country with low borrowing costs and buy assets where returns are higher.
Futures on the Chicago Board of Trade showed a 93 percent chance the Fed will halve its 1 percent target rate for overnight lending between banks at its Dec. 16 meeting, compared with 55 percent odds a week ago. The contract may not be as precise an indicator as in the past as the effective rate, a volume-weighted average of trades between major brokers for overnight funds, approaches zero.
U.S. employers eliminated 240,000 jobs last month after shedding 284,000 positions in September, the Labor Department reported today in Washington. The median forecast of economists was for a decline of 200,000 in October. The unemployment rate increased to 6.5 percent from 6.1 percent in the previous month.
In a sign the U.S. housing market remains weak, the National Association of Realtors said today in Washington that its index of signed home purchase agreements, or pending home resales, fell 4.6 percent in September.