* Dollar softens 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 pulled back from a one-week high against a basket of major
currencies on Friday after a dismal December U.S. payrolls report highlighted the need 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 and reached a high of 90.132
on Friday ahead of the data, its highest level since Jan. 1, 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.
Still, the pullback was somewhat muted as investors expect additional stimulus measures to help
buttress the economy until vaccine rollouts allow for the easing of lockdown measures.
"We have weaker-than-expected non-farm payrolls on the surface here, but not truly shocking
considering the unexpected miss, job loss recorded ... on Wednesday," said Erik Bregar, head of FX
strategy at Exchange Bank Of Canada, Toronto.
"Hence, we saw the very tepid knee-jerk bid for the broader U.S. dollar, then sell-off. The much
better-than-expected wage growth, which nobody was expecting, also takes some of the sting out of the
headline job loss."
The dollar index =USD last rose 0.043% at 89.84.
Democrats won effective control of the Senate this week, while chaos gripped Washington. Congressional
Democrats on Friday weighed impeaching President Donald Trump for a second time after his false claims of
election fraud helped encourage a mob that stormed the U.S. Capitol. The Democrats' Senate seat wins give President-elect Joe 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%.
Both the euro and the pound strengthened against the dollar in the wake of the payrolls report. The
euro EUR= was last down 0.14% to $1.2253 while Sterling GBP= was last trading at $1.3588, up 0.18% on
the day.
Bitcoin BTC=BTSP hit a fresh all-time high of $41,802.84, and last rose 4.32% to $41,217.91, after
smashing through $40,000 for the first time on Thursday. Currency bid prices at 9:49AM (1449 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 89.8400 89.8150 +0.04% +0.00% +90.1320 +89.6640
Euro/Dollar EUR=EBS $1.2254 $1.2270 -0.13% +0.30% +$1.2285 +$1.2213
Dollar/Yen JPY=D3 103.8550 103.8300 +0.00% +0.53% +104.0850 +103.6300
Euro/Yen EURJPY= 127.27 127.37 -0.08% +0.27% +127.4600 +126.9600
Dollar/Swiss CHF=EBS 0.8845 0.8855 -0.13% -0.04% +0.8884 +0.8825
Sterling/Dollar GBP=D3 $1.3589 $1.3565 +0.24% -0.48% +$1.3636 +$1.3540
Dollar/Canadian CAD=D3 1.2697 1.2690 +0.05% -0.30% +1.2707 +1.2659
Aussie/Dollar AUD=D3 $0.7769 $0.7769 +0.02% +1.01% +$0.7798 +$0.7741
Euro/Swiss EURCHF= 1.0838 1.0860 -0.20% +0.29% +1.0863 +1.0826
Euro/Sterling EURGBP= 0.9015 0.9044 -0.32% +0.87% +0.9050 +0.8994
NZ NZD=D3 $0.7252 $0.7256 -0.01% +1.03% +$0.7280 +$0.7240
Dollar/Dollar
Dollar/Norway NOK=D3 8.3955 8.4260 -0.32% -2.19% +8.4630 +8.3630
Euro/Norway EURNOK= 10.2895 10.3400 -0.49% -1.70% +10.3610 +10.2715
Dollar/Sweden SEK= 8.2073 8.1717 +0.12% +0.15% +8.2293 +8.1809
Euro/Sweden EURSEK= 10.0595 10.0473 +0.12% -0.18% +10.0690 +10.0358
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