* Dollar recovers from brief dip after weak payrolls report
* Additional fiscal stimulus expected
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
(Updates prices)
By Chuck Mikolajczak
NEW YORK, Jan 8 (Reuters) - The dollar turned higher against a basket of major currencies on Friday
after a dismal December U.S. payrolls raised expectations for further stimulus measures to prop up an
economy battered by the coronavirus and its related government lockdown measures.
The Labor Department said nonfarm payrolls decreased by 140,000 in December, the first decline in
eight months, well below expectations that called for a still-weak increase of 71,000 jobs. The
unemployment rate was 6.7%. Economic data during the week leading up to Friday's report indicated a
stalling labor market. The greenback had been climbing from a nearly three-year low on Thursday as a rise in U.S. yields
US10YT=RR helped fuel the unwinding of bearish bets on the currency, with traders taking profits against
the euro in particular.
After a brief pullback after the release of the data, the greenback resumed its path higher, as
expectations grew for additional stimulus measures to help buttress the economy until vaccine rollouts
allow for the easing of lockdown measures.
"You would've thought you would get a number like this, and you would say to yourself here comes that
downward pressure or weakness into play and, lo and behold, the market says you're not right, we are going
to go a little bit stronger," said JB Mackenzie, Managing Director for Futures & Forex at TD Ameritrade in
Chicago.
"You do have some expectations priced into the dollar of increased stimulus coming through, obviously
the new presidency coming in as well, so expectations got priced in right off the bat so that is why you
are seeing it holding."
The dollar index =USD last rose 0.35% at 90.117 after touching a high of 90.252, it's best level
since Jan 1.
U.S. President-elect Joe Biden said the jobs report shows Americans needed more immediate relief now
and that taking action now would help the economy even with deficit financing, including $2,000 stimulus
checks. The Democrats' Senate seat wins give Biden latitude to push through more spending, which some analysts
predict will fuel risk appetite and be negative for bonds and the dollar, although a strongly bearish
consensus outlook for the greenback at the end of 2020 has eased somewhat. The dollar index dropped 7% in 2020 and as much as 0.9% in the first few days of the new year on
expectations of U.S. fiscal stimulus. But since hitting its lowest level since March 2018, the greenback
has found some footing, climbing as much as 1.2% over two sessions.
Both the euro and the pound weakened against the dollar as it gained ground. The euro EUR= was last
down 0.5% to $1.2209 while sterling GBP= was last trading at $1.3562, down 0.01% on the day.
Bitcoin BTC=BTSP hit a fresh all-time high of $41,802.84, and last rose 2.39% to $40,454.81, after
smashing through $40,000 for the first time on Thursday. Currency bid prices at 2:49PM (1949 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 90.1170 89.8150 +0.35% +0.00% +90.2520 +89.6640
Euro/Dollar EUR=EBS $1.2211 $1.2270 -0.49% -0.07% +$1.2285 +$1.2193
Dollar/Yen JPY=D3 103.9400 103.8300 +0.12% +0.64% +104.0850 +103.6300
Euro/Yen EURJPY= 126.91 127.37 -0.36% -0.01% +127.4600 +126.8200
Dollar/Swiss CHF=EBS 0.8866 0.8855 +0.14% +0.23% +0.8884 +0.8825
Sterling/Dollar GBP=D3 $1.3562 $1.3565 -0.01% -0.72% +$1.3636 +$1.3540
Dollar/Canadian CAD=D3 1.2716 1.2690 +0.21% -0.13% +1.2743 +1.2659
Aussie/Dollar AUD=D3 $0.7747 $0.7769 -0.29% +0.70% +$0.7798 +$0.7729
Euro/Swiss EURCHF= 1.0825 1.0860 -0.32% +0.17% +1.0863 +1.0821
Euro/Sterling EURGBP= 0.9001 0.9044 -0.48% +0.72% +0.9050 +0.8994
NZ NZD=D3 $0.7222 $0.7256 -0.47% +0.57% +$0.7280 +$0.7206
Dollar/Dollar
Dollar/Norway NOK=D3 8.4480 8.4260 +0.34% -1.54% +8.4770 +8.3630
Euro/Norway EURNOK= 10.3155 10.3400 -0.24% -1.45% +10.3610 +10.2715
Dollar/Sweden SEK= 8.2348 8.1717 +0.09% +0.47% +8.2508 +8.1809
Euro/Sweden EURSEK= 10.0560 10.0473 +0.09% -0.20% +10.0730 +10.0358
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