Dollar gives up gains after positive jobs report

AP News
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Posted: Aug 11, 2011 4:25 PM
Dollar gives up gains after positive jobs report

The dollar gave up its gains against most major currencies after a better-than-expected U.S. unemployment claims report.

The report that first-time claims fell below 400,000 last week for the first time in four months, a positive sign for the job market, gave investors a reason to test the market for stocks and currencies that traders consider riskier than the dollar.

The euro recovered after sinking earlier in the day on fears about the health of European banks and worries that France, a core European economy, could get trapped in the debt crisis.

In late trading, the euro edged up to $1.4216 from $1.4208 late Wednesday. It had fallen as low as $1.4102 in European trading.

Reports that Switzerland's central bank is considering pegging the franc to the euro propelled the dollar up by more than 5 percent against the Swiss currency. The dollar and euro have recently fallen to record lows against the franc because investors consider Switzerland's currency a "safe" alternative to the euro. The euro has been volatile because of concerns about Europe's debt crisis.

The Swiss central bank has taken several steps to try to weaken its currency. A strong franc makes its exports less competitive overseas.

The dollar was worth 0.7636 Swiss franc Thursday, up from 0.7296 late Wednesday.

In other trading Thursday, the British pound rose to $1.6213 from $1.6160, while the dollar was unchanged at 76.83 Japanese yen and dropped to 98.65 Canadian cents from 99.06 cents.

The dollar retreated from some of its recent gains against a group of six major world currencies. It has risen about 1 percent this month as investors sought safety during a broad stock market sell-off triggered by worries about a slowdown in global growth and a deepening European debt crisis. The U.S. currency had risen about 1 percent against that basket of currencies this month. It ticked down 0.3 percent Thursday.