Dollar strengthens against euro

LONDON: The dollar strengthened against the European single currency on Monday, drawing further support from stronger-than-expected US jobs data that was published before the weekend, analysts said.

In morning European trade, the euro sank as low as 1.4756 dollars, reaching the lowest point since early November. It later pulled back to 1.4814, down from 1.4852 dollars late in New York on Friday.

Against the Japanese currency, the dollar eased to 90.00 yen from 90.47 yen late on Friday.

Gold continued to slump on the back of the stronger dollar, having struck a record high of 1,226.56 dollars an ounce in London last week.

On Friday, the dollar had also shot up after strong jobs data cheered investors who saw it as a sign of US economic recovery.

"The catalyst for the dollar bounce came with the US employment data for November released last Friday," said analyst Kit Juckes at currency group ECU.

Official data showed the US labour market witnessed a dramatic improvement in November, as the number of jobs lost narrowed to 11,000 and the unemployment rate dipped to 10.0 percent.

"The 'improvement' in the US jobs market secures a better foundation for rebuilding consumer confidence and a recovery in consumer spending," added VTB Capital economist Neil MacKinnon.

"The markets will also conclude that 'better' US economic data both hastens the withdrawal of the Fed?s credit-easing measures and increases the probability of an earlier hike in the Fed funds rate."

However, the dollar lost some steam in earlier Asian trade as Japanese exporters moved to sell the greenback following a sharp rebound, dealers said.

"The dollar's rebound was stemmed as export companies are selling," Resona Bank dealer Masatoshi Omata said.

"They had been seeking opportunities to sell dollars and finally saw the dollar's rebound," he said, adding that the greenback was likely to stay weak, with US interest rates expected to remain low for some time.

In late November, the dollar had dived to its lowest level in 14 years against the yen, dampening the earnings outlook of Japanese exporters whose overseas income would be eroded by the strong yen when repatriated.

In London on Monday, the euro was changing hands at 1.4814 dollars against 1.4852 dollars late on Friday, at 133.34 yen (134.37), 0.9053 pounds (0.9022) and 1.5115 Swiss francs (1.5092).

The dollar stood at 90.00 yen (90.47) and 1.0203 Swiss francs (1.0160).

The pound was at 1.6364 dollars (1.6456).

On the London Bullion Market, the price of gold fell to 1,147.80 dollars an ounce from 1,190.25 dollars late on Friday.