US focus: Dollar advances as Jobless rate falls even as winter storms cap payrolls

The dollar advanced for a third day against the euro and yen in the longest stretch of gains in four weeks after the U.S. jobless rate fell to the lowest level since April 2009 even as winter storms limited gains in payrolls.
“As the focus shifted to the unemployment rate instead of the headline nonfarm payrolls, we saw euro-dollar breaking lower,” said Mary Nicola, a currency strategist at BNP Paribas SA.
U.S. unemployment unexpectedly dropped to 9% last month from 9.4% in December, the Labor Department said today. Employers added 36,000 workers, the smallest gain in four months, after a 121,000 rise that was larger than initially reported.

Canada’s currency touched a two-year high versus the dollar as the nation’s employment rose more than four times economists’ forecasts.
Statistics Canada reported that employment rose by 69,200, compared with the median forecast of 15,000 in a survey of economists. The jobless rate rose to 7.8% from 7.6%. Full-time employment rose by 31,100 in January, and part-time jobs increased by 38,000.
The Canadian employment report restores the nation’s status as having regained all the jobs lost in the recession. A Jan. 28 revision based on updated census data reduced Statistics Canada’s estimate of total employment.
The euro was poised for a weekly decrease of 0.1% versus the dollar as European Union leaders met in Brussels to try to narrow differences on ending the region’s debt crisis.
Germany and France are at odds over possible bond buybacks and a “competitiveness pact,” which is German Chancellor Angela Merkel’s condition for strengthening the safety net for debt-strapped countries.
The euro fell 1.3% yesterday, the most since November, as European Central Bank President Jean-Claude Trichet said inflation has been prompted “mainly” by rising energy and commodity costs, dimming prospects for a boost in the target lending rate from a record low 1%.
Fed Chairman Ben S. Bernanke said yesterday that the U.S. needs to see faster job growth for a sufficient time before policy makers can be assured the economic recovery has taken hold.