The euro was stronger against the dollar and yen Friday as investors shrugged off disappointing U.S. jobs data and seesawing U.S. stocks caught in volatile trading.
The common currency initially sank to more than a three-week low after the worse-than-expected U.S. data, but traders ignored the bad news and bid the euro higher, analysts said.
Trading was volatile as investors adjusted positions after the payrolls data and ahead of the weekend. Market volatility is common after the monthly jobs report.
Loose U.S. monetary policy means investors have lots of dollars sloshing around their portfolios, said Sebastien Galy, currency strategist at BNP Paribas in New York. So even if economic data disappoints, as long as it's not a disaster, traders keep seeking higher returns in the euro and other riskier assets, he said.
"Every time the euro goes on the dip, you get demand that comes in out of cash," Galy said.
U.S. non-farm payrolls data for September released Friday showed employers eliminated 263,000 jobs in September, more than expected, as the unemployment rate climbed to 9.8%, the Labor Department said.
Economists surveyed by Dow Jones Newswires had expected a drop of 175,000 jobs.
The common currency dropped as low as $1.4480 on the disappointing data before retracing those losses to gain on the dollar for the day, but ending below its intraday high of $1.4650. The Dow Jones Industrial Average dropped 22 points.
To see the euro's move against the dollar, please see:
http://dowjoneswebservices.com/chart/view/2893
Despite the jobs data, "the [dollar] downtrend is still firmly in place, and will be until the Fed signals it will begin lifting interest rates," said Michael Woolfolk, senior currency strategist at the Bank of New York Mellon. If stocks rally next week, the dollar could sell off even more, he said.
Late Friday, the euro was at $1.4572, from $1.4526 late Thursday, according to EBS via CQG. The dollar was at Y89.75 from Y89.77. The euro was at Y130.79 from Y130.39. The U.K. pound was at $1.5913 from $1.5940, while the dollar was at CHF1.0358 from CHF1.0420.
The dollar also fell against the yen, as currency traders continued to test the resolve of the newly minted Japanese government when it comes to intervention in currency markets, said Omer Esiner, senior market analyst at Travelex Global Business Payments in Washington.
Japanese Finance Minister Hirohisa Fujii reiterated Friday he would not discuss the yen's recent rise against the U.S. dollar at a weekend meeting of finance chiefs from the Group of Seven industrialized countries in Turkey, Kyodo News reported.
"I will not touch" on the issue, Fujii told reporters at Narita airport shortly before leaving for a half-day G-7 meeting Saturday in Istanbul.
He also said it is "preferable" if the currency market is "stable."
But Bank of Japan Governor Masaaki Shirakawa said Friday that he and other finance chiefs from the group would likely discuss foreign exchange when they meet in Istanbul Saturday to discuss the world economies.
"During the G-7 meeting, [foreign exchange] will likely be debated as usual," Shirakawa told reporters. He added that "I don't know what we may talk about" regarding the issue.
Meanwhile, investors Friday were watching the Swiss franc, as it gained to a level against the euro at which analysts said the Swiss National Bank could intervene to temper franc strength. Late Friday, the euro was at CHF1.5095, below the key CHF1.51 level, which the SNB watches closely.
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