In the currency market, the dollar sank against the euro. Late Friday, the euro was trading at $1.2932 vs. $1.2861 on Thursday.

Yesterday came the grim jobs figures everyone was expecting. The Labor Department reported that non-farm payrolls fell by a seasonally adjusted 598,000 in January after a revised loss of 577,000 in December. That marked the largest payroll loss since December 1974.

At the same time, the unemployment rate soared to 7.6%, compared with 7.2% in December. That was even worse than already-pessimistic economists’ expectations for a rise to 7.5%, and is the highest unemployment rate since September 1992.

“These numbers are dreadful but does it matter?” asked Alan Ruskin of RBS Greenwich Capital. “No,” he wrote. “All the prior labor market indicators, notably the claims data, gave a feeling of foreboding before these numbers. The data broadly delivered.”

And Kathy Lien, director of currency research at GFT, pointed out “that traders believe the bad number will probably push the Obama administration to act quickly on passing the stimulus plan.”

Lien added that, “Despite the staggering job losses, the markets are not terribly focused on the non-farm payrolls numbers today … Traders are hopeful about developments in Washington including a possible Senate vote today and a bank rescue package on Monday.”

The Obama administration promises on Monday to release a “comprehensive plan” to revitalize the financial markets. The plan is expected to include a new strategy to deal with banks’ bad assets and a new program to help troubled homeowners avoid foreclosure.

Source: Dollar Falls vs. Euro

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