The euro slid to a two-week low against the U.S. dollar Friday after a report on U.S. payrolls showed encouraging signs about the American economy even as the unemployment rate rose to its highest point in more than a year, REPORTED AP. The 13-nation euro slid to as low as US$1.4030 in afternoon European trading, before rising to US$1.4065, down from the US$1.4117 it bought late Thursday in New York. That came after the U.S. Labor Department reported that employers boosted payrolls by 110,000 in September and said that the economy actually added 89,000 jobs in August instead of the 4,000 jobs lost it had initially estimated. Despite the gain, the U.S. unemployment rate rose to 4.7 percent, its highest in just more than a year. The August report had helped put the dollar in a skid, along with a move by the U.S. Federal Reserve Bank last month to cut its benchmark interest rate by more than expected to 4.75 percent in reaction to the U.S. subprime credit debacle. But the dollar found support as sentiment leaned toward the September results being better than expected, said James Hughes, a market analyst with CMC Markets in London. He also said decisions on Thursday by the European Central Bank and Bank of England, and comments by ECB President Jean-Claude Trichet, to keep interest rates steady at 4 percent and 5.75 percent, respectively, also helped keep the euro in check. A higher euro makes goods from the euro zone more expensive for customers elsewhere, and cuts into manufacturers' profits if they try to keep the U.S. dollar price of products constant. While it makes U.S. exports cheaper, it cuts the spending power of Americans visiting or working in Europe. «Yesterday's rate verdicts from both London and Frankfurt have also given traders cause to take stock _ a quarter point cut at the Bank of England is looking increasingly likely _ whilst Trichet's tone is again being seen as rather more bearish than had been anticipated,» Hughes said. The British pound slipped to US$2.0338 from US$2.0375 on Thursday after the Bank of England said it was looking for more time to assess the impact of the credit squeeze on consumer and economic confidence. The dollar strengthened to purchase 116.98 Japanese yen from 116.51 in New York.
