Dollar buoyed by jobs data
Grim report on the nation's labor market boosts the greenback's safe-haven appeal.
NEW YORK (CNNMoney.com) -- The dollar rose against the euro and the pound Friday, as investors flocked to the perceived safety of the greenback following a dismal report on the nation's labor market.
The euro fell to $1.2658 in New York trading from $1.2790 on Thursday.
Britain's pound slipped to $1.4597 from $1.4680.
But the dollar was down against the Japanese yen, which is also considered a safe haven by currency traders. The dollar fell to ¥92.12 from ¥92.29.
The dollar's advance comes after the U.S. Labor Department said the economy lost 533,000 jobs in November, the largest monthly job loss in 34 years. So far this year, the economy has shed nearly 2 million jobs.
"The startling jobs data is the catalyst for the pessimistic outlook for the global economy," said Gareth Sylvester, senior currency strategist at foreign exchange brokerage HiFX. "The recessionary outlook is what's increasing the risk-aversion play and continues to buoy the U.S. dollar."
Currency traders often buy traditionally low-yielding currencies, such as the dollar and the yen, when the economic picture darkens. These currencies are considered less risky than the traditionally higher-yielding euro and pound.
"The dollar will continue to be a dominant force as long as the global economy remains week," Sylvester said.
At the same time, the currency market is digesting aggressive moves by European central banks.
On Thursday, the European Central Bank cut its key lending rate by three-quarters of a percentage point to 2.50% and the Bank of England cut its rate to 2% from 3%.
Friday's grim jobs report could increase the likelihood that the Federal Reserve will cut its already low benchmark interest rate when it meets Dec. 15-16.
Last month, the U.S. central bank cut its key Fed funds rate by one-half percentage point to 1%. 
