US focus: Dollar drops on highest unemployment rate in 2011

The dollar dropped the most in a month against the yen after the government’s payrolls report showed employers added the fewest jobs in nine months and the unemployment rate increased to the highest level this year.
“This number is so horribly below what people expected,” said Boris Schlossberg at GFT Forex.
Payrolls expanded by 18,000 in June after a revised increase of 25,000 in the previous month, the Labor Department reported today. The median forecast of economists was for 105,000 more jobs. The unemployment rate unexpectedly increased to 9.2%.
President Barack Obama said today’s job report shows that ‘we still have a long way to go and a lot of work to do to give people the security and opportunity they deserve.”
The Canadian currency slid 0.4%. Rate earlier rose after the government reported that Canada’s employers added more jobs last month than economists forecast.
The euro headed for a 1.9% weekly drop versus the dollar, its biggest in almost a month.
“There’s a lot of concern about the Italian banks,” said Mark McCormick, a currency strategist at Brown Brothers Harriman & Co.. “This is something that’s weighing on the euro. It gets back to the heart of the euro-zone debt crisis.”
The European Central Bank signaled more interest-rate increases yesterday after raising the target lending rate by a quarter-percentage point to 1.50%.