US jobs crisis piles pressure on dollar

The US dollar remained under intense pressure yesterday after the latest US government figures showed the world's most powerful economy is still struggling to create jobs. American companies created only 112,000 jobs in November, lower than the worst forecast. Job gains for the past two months were also revised downwards -- an event that now seems routine. The dollar fell three quarters of a cent against the euro, to $1.3371. A German newspaper report claimed US Treasury Secretary John Snow will not intervene to aid the dollar until the euro is worth at least $1.45. Bob Lynch, senior currency strategist at BNP Paribas, said: "It's not a question of whether you believe the story or not, it's just the perception it leaves in the market." By early afternoon in New York the euro had surged above $1.34, another high. It is unclear how long Mr Snow will be in a position to do anything, however. He is expected to leave the post soon as part of a wide-ranging shake-up of President Bush's economic team. Wall Street was hoping for a jobs number of more than 200,000, after a strong October when 337,000 positions were created. This was scaled back to 303,000 yesterday. At current levels, the US is not making enough positions to keep pace with new entrants to the jobs market. One of the worst results was in the retail sector, which normally hires strongly before Christmas. Instead, shops let 16,000 staff go, a reflection of the poor recent sales. [more]

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