Dollar slips as US unemployment jumps to 26-year high of 9.7 pct in August

Dollar slips as unemployment rate jumps to 9.7 pct

NEW YORK — The dollar ended slightly lower Friday after a report showing rising U.S. unemployment.

The 16-nation euro rose to $1.4309 in late New York trading from $1.4251 late Thursday, while the British pound gained to $1.6397 from $1.6320. Meanwhile, the buck rose to 93.02 Japanese yen from 92.57 yen.

On Friday, the Labor Department said the country’s jobless rate rose to 9.7 percent in August, its highest level since 1983, from 9.4 percent in July. Many private economists, and the Federal Reserve, expect the unemployment rate to top 10 percent by the end of this year.

But the government also said the economy shed 216,000 jobs last month, which is the smallest amount of jobs cut in a year.

The buck might have slipped today, but a deteriorating employment situation will continue to prop up the dollar and the yen, said Dan Cook, senior market analyst at IG Markets, in a research note. The dollar and the yen tend to gain on investors’ “risk aversion,” when bad news on the economy drives them to seek safety in cash and short-term government debt.

On Thursday, the European Central Bank left its key interest rate steady at 1 percent, and said it saw signs of moderate growth in the euro zone. It also raised its outlook for the region’s economy.

The ECB’s interest rate is still higher than the Federal Reserve’s set rate near zero. Higher interest rates can support a currency as investors move funds to where they earn higher returns.

The dollar slipped to 1.0605 Swiss francs in late trading from 1.0626 francs Thursday, and dropped to 1.0862 Canadian dollars from 1.1039.