The dollar fell to a new low against the euro yesterday, undermined partly by poorer-than-expected job creation figures.
The euro surged above $1.34 on its way to hit a new record high around $1.3444. The dollar weakened against other major currencies.
The ailing currency was not helped by news that the US economy created only 112,000 jobs last month, disappointing expectations of a stronger reading and signalling that businesses remain cautious about adding to their payrolls. Economists had expected closer to 200,000 new jobs, following October's strong employment report.
Separately, a report from the New York-based Institute for Supply Management pointed to further growth in the nation's service sector but also underlined caution about hiring.
In a further sign the labour market is improving only slowly, the Labor Department lowered its estimates for job growth in both September and October.
October's gain was marked down to 303,000 from an originally reported 337,000-job increase, boosted by temporary jobs created to clean up after the hurricanes, economists said. The department cut September's total to 119,000 from 139,000.
Economists cite concern over high oil prices and the outlook for consumer spending as reasons for business caution. The payroll survey showed job creation was weak across industries last month, and there was a 5,000 decline in manufacturing employment, in contrast with upbeat surveys of business confidence.
Bonds rose after the report and the dollar weakened.
Lower than expected employment growth, following signs of a weaker start to the holiday shopping season than expected, raise a question over the strength of the economy. However, other indicators have suggested the labour market may be stronger than the payroll survey suggested.
The low payroll growth is unlikely to affect significantly the Federal Reserve's intentions of continuing to raise the federal funds rate at a measured pace.
"For the Fed, the average of 178,000 for the past three months is better than the average of 126,000 for the previous three months, and enough to keep them on track," said Mr Richard Berner, chief US economist at Morgan Stanley.
The central bank is expected to raise rates by a quarter point to 2.25 per cent when it meets later this month.
Oil prices dropped again yesterday, bringing this week's slide to nearly 15 per cent.
The losses were kept in check, however, after a senior OPEC delegate raised the possibility that the oil cartel could rein in output when it meets next week, if prices keep declining. - (Financial Times Service/Reuters)
Notified redundancies during November in Ireland, again undershot the respective figure for last year. The Department of Enterprise, Trade and Employment was notified of 1,953 jobs losses during the month, down 16 per cent on the same month last year.
The 22,080 redundancies notified so far in 2004 is 11 per cent below the figure for 2003.
