The US dollar staged a broad based rally against the major in New York despite a sharp fall in non-farm payrolls as dollar positive comments by the Fed Chairman Alan Greenspan kept the greenback well bid.
Non-farm payrolls fell significantly short of expectations, rising only 146k, compared to projected increase of 200k.US corporations added much fewer employees in the month of January, and December payroll gains were revised lower. The weak jobs data pushed the dollar lower against the majors, but Greenspan put an abrupt end to the rally by commenting on current account corrections. Greenspan comments that current account deficit would narrow over time, provided catalyst to the dollar rally, pushing the greenback to the three-month highs.
The US dollar was quoted at 1.2871-74 against the euro, 1.8754-54 versus the British pound and 104.01-05 against the Japanese yen at 21:00 GMT.
U.S. stocks staged broad based rally, posting the biggest one-day gain this year as traders speculated that weaker than expected jobs data may put Fed's tightening policy on hold.
The Dow Jones Industrial Average rose 1.2 percent, to 10,716.13. The Standard and Poor's 500 Index closed at a 2005 high, 1.1 percent, to 1203.03. The NASDAQ Composite Index increased 1.4 percent, to 2086.66,
Homebuilders were amongst the best performing sectors with D.R. Horton, largest US homebuilder, gaining $3.23 to $43.84, followed by rival Pulte Homes Inc. up $4.38 to $70.72.
Altria rallied $3.26, or 5.1 percent, to $67 after the tobacco companies won a court ruling to block a $280 billion claim. British American Tobacco Plc, the world's No. 2 cigarette maker, rose 75 cents to $36.15. Reynolds American Inc., which owns R.J. Reynolds Tobacco, gained $3.69 to $85.60.
The NYMEX crude oil futures contract for March delivery rose 5 cents to $46.50 per barrel as traders remained on the sidelines as OPEC may cut production output.
The COMEX gold futures contract for April delivery fell $2.60 to 415.90 per ounce as traders sold the precious metal after the dollar rallied against the majors.
US Treasuries rallied, pushing the yields to the one-month low as traders speculated that the Federal Reserve may put its tightening policy on hold after the US economy created fewer than expected jobs in January. The 10-Year US Treasury Note gained .22 to 101.12, with yield lower by 9 basis points to 4.08 percent. The 10-Year Treasury note futures contract for March delivery gained .68 to 112.21.