Tokyo - The dollar fell to a two-year low against the euro on Wednesday after a weak US jobs report fuelled expectations the Federal Reserve would keep its stimulus programme in place until next year.
In Tokyo, the euro climbed to $1.3790 from $1.3780 in New York where it had touched $1.3792 at one point - its highest level since November 2011. The single currency dipped to 135.07 yen against 135.23 yen.
The greenback fetched 97.95 yen, weakening from 98.12 in New York on Tuesday afternoon.
On Tuesday, the Labour Department said the economy added 148 000 jobs last month, well below forecasts for a gain of 180 000, even before a two-week government shutdown this month that may also have affected hiring.
While the data indicates the US recovery is still tentative, analysts said it suggests the Fed will hold off winding down its stimulus scheme put in place last year to kickstart growth. The bank has said it will only cut down on its purchases once the economy is strong enough.
“The euro has been in demand against the dollar, mainly on the back of lower adjusting Fed monetary policy expectations,” Credit Agricole said.
“The data was perceived to provide more concrete evidence that the Fed will only begin to slow its asset purchases next year, with many now looking for tapering to only begin in March 2014.”
Eyes will now be on the release of eurozone economic data on Thursday for hints about the health of the 17-nation bloc. - AFP