Saturday, 08 September 2012 20:31:13
U.S. dollar falls, gold rallies as jobs data spurs Fed hope
NEW YORK, Sept 8 (APP/Reuters) - The U.S. dollar sank against
major currencies on Friday and gold prices jumped to a six-month
high as anemic American jobs growth fueled investor bets that
the Federal Reserve will launch another round of monetary
stimulus for the world's biggest economy, perhaps as soon as
Yields on safe-haven U.S. Treasuries slumped on the
disappointing August jobs data, while yields on Spanish and
Italian government debt extended their slide to multi-month lows
after the European Central Bank on Thu rsday announced plans to
combat the region's three-year-old debt crisis by buying
The prospects for ECB action supported the euro early in the
session, and the currency extended its gains after the U.S.
Labor Department reported nonfarm payrolls increased by 96,000
in August, well below forecasts for 125,000 new jobs.
The Federal Reserve starts a two-day policy meeting on
Wednesday, and markets will keenly await the U.S. central bank's
statement issued on Th ursday and a media briefing by Chairman
"This weak employment report, in jobs, wages, hours worked
and participation is probably the last piece the Fed needs
before launching another round of quantitative easing next
week," said Joseph Trevisani, chief market strategist at
Worldwide Markets in Woodcliff Lake, New Jersey.
"QE will boost equities, damage the dollar and do little for
the economy, but what else can an activist Fed do?"
The U.S. dollar fell 1.0 percent to 80.194 against a basket
of major currencies. The euro touched around a
four-month high against the dollar of $1.2814 before paring
gains to trade at $1.2810. Against the Swiss franc the common
currency rose to its highest level in eight months. U.S. gold
futures jumped to $1,740.80, the highest since late