NEW YORK, Jan 10: The dollar held its ground against its main rivals on Friday despite news of another half-million US job losses, figures that showed an ailing US economy but were largely in line with forecasts. The euro was undermined by speculation about a further drop in eurozone interest rates next week, they said. At 2200 GMT, the European single currency fell to $1.3453 from $1.3704 in New York late on Thursday.

Against the Japanese unit, the dollar dropped to 90.29 yen from 91.11 yen on Thursday. US employers shed a massive 524,000 jobs in December, capping a yearly loss of 2.6 million, as a deepening recession pushed unemployment to a 16-year high of 7.2 per cent, official data showed Friday.

The foreign exchange and equity markets took the news in their stride, however, as traders had already discounted the weak figures.

It is hard to find solace in an indicator that meets expectations when it is the US non-farm payrolls showing more than a half million jobs lost through a single month,” said John Kicklighter, strategist at Forex Capital Markets.

Kicklighter said that the dollar’s outlook remains unfavorable since “the steady plunge in employment inevitably lowers the fundamental outlook for the US economy going forward; and moreover, it puts the US dollar further behind the recession curve than its global contemporaries. Kicklighter added that for dollar investors, this report is very discouraging.

We have not seen a successive back-to-back drop in employment as large as this November/December plunge since at least records began back in 1939. Some said the staggering job losses in the Labor Department report heightened a sense of urgency for president-elect Barack Obama and the new Congress to agree on swift economic stimulus plan.—AFP