NEW YORK — The euro rose nearly half a penny against the dollar Friday, helped by weak U.S. unemployment data. The dollar also dipped slightly against the yen.
America’s unemployment rate shot up to 4.5 percent in April, the highest level in 2 1/2 years, and businesses slashed their payrolls by the largest amount since the recession year of 1991, the Labor Department said.
Both the increase in the unemployment rate and the cut in jobs surprised many analysts. They were predicting that the unemployment rate would rise to 4.4 percent and that businesses actually would add jobs during the month.
“But the preference to sell dollars against both the euro and the yen was very short-lived,” said currency strategist at Bank One Capital Markets in Chicago, Craig Larimer. The dollar initiated a rebound as “markets began to see what was happening in the U.S. with bonds and equities,” he continued.
After dropping more than 100 points, the Dow Jones industrial average rebounded to finish the day up 154 points at 10,951 — its best finish since early February — as investors bet the Federal Reserve would cut interest rates again at its May 15 meeting.
In late New York trading, the euro was quoted at 89.53 cents, up from 89 cents late Thursday, though rose above 90 cents at one point.
Yen trading was thin in Japan due to the several national holidays associated with Golden Week. Traders look forward to more information about reform plans from Prime Minister Junichiro Koizumi on Monday.
In late New York trading, the dollar was quoted at 121.25 Japanese yen, down from 121.41 yen.
The dollar also was quoted at 1.7251 Swiss francs, down from 1.7332, and 1.5351 Canadian dollars, up from 1.5329. The British pound rose to $1.4388 from $1.4358.
Currencies of the 12 countries participating in the euro are no longer traded separately and are tied to the euro by a fixed rate. Based on Friday’s euro rate, the dollar was worth 2.1846 German marks, down from 2.1972; 7.3258 French francs, down from 7.3695; and 2,162.71 Italian lire, down from 2,175.34.
