US jobs growth sparks rise in greenback

THE dollar rose to a one-month high against the yen after a United States government report showed that November job growth exceeded forecasts, reducing concern the world's largest economy will head into a recession.

The US currency posted a second weekly gain versus the yen as traders pared bets the Federal Reserve will cut borrowing costs by a half-percentage point tomorrow, Bloomberg News said.

The British pound and the Canadian currency fell against the dollar and euro this week after central banks in the UK and Canada reduced interest rates. The European Central Bank kept its rate unchanged.

"The US economy is slowing down, but not heading into a recession," said Paresh Upadhyaya, of Putnam Investments in Boston. "The report doesn't justify an aggressive rate cut from the Fed. Investors are feeling more comfortable selling the yen" against the dollar in this environment.

The dollar advanced this week to 111.68 yen, from 111.24 on Nov. 30. It reached 111.79 yesterday, the strongest since November 9. The Japanese currency fell to 163.73 against the euro, from 162.82, over the same period. The euro gained to US$1.4658, from US$1.4633. The pound declined to US$2.0304, from US$2.0563.

The yen's decline accelerated last week when US President George W. Bush announced a plan to freeze interest rates on some subprime mortgages. Investors returned to the carry trade as concern eased that credit-market losses will drag down economic growth.

Brazil's real was the best performer compared with the 16 most-actively traded currencies this week, rising 2.5 percent against the yen.