Dollar tumbles against euro as fewer jobs created in US

 The dollar plummeted against the euro and sterling, while gold prices rose after the nonfarm payrolls report missed estimates and showed much fewer jobs were created in the United States in March than had been predicted.

Data from the U.S. Department of Labor showed that a disappointing 88,000 jobs were added to the economy  last month, the smallest job creation in nine months, and much lower than the 200,000 expected.

February’s numbers were revised up to a 268,000 gain, that was higher than the first estimated figure of 236,000.

The unemployment rate dropped to 7.6 percent despite expectations for it to remain unchanged at 7.7 percent, but. The reason for the decline was that the labor force participation rate dropped to 63.3 percent, the lowest since May 1979.

Sterling shot up to a six-week high against the dollar after the jobs data, hitting a high of $1.5325 from $1.5239.

The euro broke above the key $1.3000 level to briefly hit a high of $1.3028, the highest level since March 25, rising from pre-data levels of $ 1.2951.

 The dollar briefly plunged against the yen to 95.75 yen after the data from 96.27 just before the data. The dollar subsequently recovered and moved back up to previous levels around 96.20 yen within a half hour of the data that was released at 8:30 am New York time, as the yen is broadly weaker due to Bank of Japan monetary easing measures.

The weaker jobs data might reduce the likelihood that the Federal Reserve could slow its asset purchases under quantitative easing later this year.

Meanwhile against the Canadian dollar, the greenback surged due to the fact that Canadian jobs data were unexpectedly worse.

The Canadian economy lost 54,500 jobs in March, while the unemployment rate rose 0.2 percentage points to 7.2 percent.

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