Dollar Pares Losses After December U.S. Payrolls Report

The dollar pared losses after employment rose more than forecast in December and the jobless rate declined to 5.6 percent, even as earnings unexpectedly declined from a month earlier.

The addition of 252,000 jobs followed a 353,000 rise the prior month that was more than previously estimated, a Labor Department report showed today in Washington. The jobless rate dropped the lowest level since June 2008. The median estimate of 99 analysts surveyed by Bloomberg News before the release called for 240,000.

“When there’s a well-established trend in the markets, it’s never a straight line up or down,” Stephen Stanley, chief economist at Amherst Pierpont Securities LLC in Stamford, Connecticut, said before the release. The dollar “is being driven primarily by expectations on monetary policy among the various key central banks, and certainly it seems like, over the course of this next year, the Federal Reserve’s going to be going in the opposite direction to the Bank of Japan and European Central Bank. That big picture is not likely to be altered.”

The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, fell 0.2 percent to 1,145.09 as of 8:34 a.m. in New York after dropping as much as 0.4 percent.

The dollar rose 0.9 percent on Dec. 5 when data showed U.S. employers added 321,000 jobs in November, the most since January 2012. The currency declined 0.6 percent a month earlier, the most in three weeks, after a report showed companies added 214,000 jobs in October, missing projections. That number was later revised to 243,000.

While the Fed has urged patience on rate increases, the central bank reiterated that monetary policy depends on data and noted improving labor market conditions in minutes from its latest meeting published Jan. 7.

The Fed has held rates near zero since 2008 to support the economy. Futures contracts show about 58 percent odds the central bank will raise the target for its benchmark to at least 0.5 percent by September.

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