NEW YORK (AP) — The dollar fell broadly Friday after a U.S. report on jobs showed surprisingly weak hiring in June.
Some investors wondered if the news could lead the Federal Reserve to start a new program to support the economy by trying to keep interest rates low.
The dollar had initially climbed against the euro and other major currencies after the jobs report but then quickly reversed course. The yen and Swiss franc, considered safer bets than the dollar in this instance, spiked higher.
The government report said employers added the smallest number of jobs in nine months in June, and the unemployment rate rose to 9.2 percent. That underscores fears about a weakening U.S. economy.
The paltry jobs creation “forces the issue, are there any tools left in the policy kit to address a weak U.S. economy. Everything’s kind of used up,” said David Gilmore of Foreign Exchange Analytics in Essex, Conn. “It’s going to be difficult to get Congress to approve a new fiscal package to revive the economy.”
That shifts attention to the Fed and raises the issue of whether the central bank will resume a program to buy up Treasurys in an effort to keep interest rates low and support lending. That could help the economy, but lower rates make the dollar less attractive to investors seeking big returns on their currency investments.
In morning trading in New York, the dollar tumbled to 80.52 Japanese yen from 81.30 yen and fell to 0.8387 Swiss franc from 0.8452 Swiss franc. Investors often view the yen and franc as safe bets in times of economic turmoil.
The euro traded at $1.4324, up from just below $1.43 before the report was released despite concerns about a spreading debt crisis in Europe. On Thursday, the euro was worth $1.4351.
The British pound rose to $1.6043 from $1.5963.