Dollar Pare Losses on Positive Economic Data

The appeal for the U.S. currency surged today after an employment report showed another consecutive improvement suggesting that economic conditions are better in North America than in other wealthy regions around the world.

The greenback had its first day of gains this week advancing versus virtually all main traded currencies in foreign-exchange markets as a non-farm payrolls report indicated that employment conditions continued to improve in the U.S., supporting speculations that the economic recovery might be stronger in North American than in the U.K and Japan. The dollar gained the versus the euro today paring yesterday’s losses as the European Central Bank officials affirmed that the EU support Greece’s initiative to cut deficit, as bailout speculations by the ECB and the IMF gain strength in financial markets.

The dollar is gaining strength in the beginning of 2010 as analysts and central banks are convinced that there aren’t good substitutes for the greenback for the world’s main reserve currency. The pace of recovery in the U.S. is helping the dollar to become even more attractive, specially versus the euro and higher-yielding currencies.

EUR/USD traded at 1.3909 as of 18:00 GMT from a previous rate of 1.3967 yesterday. AUD/USD traded at 0.8824 from 0.8861 yesterday.

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