7 September 2007, 17:54   Dollar slumps

The dollar slumped after very weak non-farm payrolls data, which aggravated fears about the state of the US economy and cemented expectations the Federal Reserve will cut interest rates on Sept 18. US employers in August unexpectedly posted their first monthly payroll decline in four years as manufacturing and construction workers both posted sharp declines, the Labor Department said today. The economy lost 4,000 jobs in August, an unexpected loss compared with the 118,000 increase economists polled by Thomson's IFR Markets had expected. The August decline is the first drop in non-farm payrolls since August 2003. Analysts had downgraded their expectations as the data drew nearer but were still far from predicting a fall in jobs. At 12.38 GMT, the pound was sharply higher against the dollar, trading at 2.0282 usd from 2.0220 just before, while the euro was at 1.3755 usd from 1.3695. Against the yen, the dollar was trading at 114.47 yen, down from 115.20 just before the data.

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