Dollar Falls on Poor Employment Reports

The US dollar dropped today after the report showed that the unemployment rate in the US was at the highest level in 26 years as the US employers added only about one-third as many jobs as was expected, driving the investors away from the dollar to other currencies.

The US nonfarm payrolls grew by 39,000 work places in November. That’s significantly less than the growth by 172,000 in the October and the forecast reading of 143,000. The unemployment rate grew to 9.8 percent. It was expected to remain unchanged at 9.6 percent.

The poor employment reports caused the new wave of the criticism of the Federal Reserve’s quantitative easing program and renewed the concerns that it may destabilize the economy. The Standard & Poor’s 500 Index was little changed after it dropped 0.4 percent. The dollar fell against all most-traded currencies except the Mexican peso and the Canadian dollar.

EUR/USD closed at 1.3411 today after opening at 1.3208. GBP/USD closed at 1.5771, rising from 1.5599. USD/JPY dropped from 83.81 to 82.71, following the decline to the intraday low of 82.53.

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