The U.S. dollar fell this week as weak signs of U.S. economic recovery strength emerged, raising concerns about a double-dip recession and Greece was expected to receive new financial aids from International Organizations.
The U.S. unemployment climbed to 9.1 percent in May from 9 percent, according to report from Labor Department. The momentum for the economy to add more jobs also weakened, as the nation's economy added only 54,000 jobs in May, the fewest in eight months and the figure was far less than the 125,000 expected by economists.
The manufacturing sector, which was the major driving force for U.S. economic recovery since last recession, also showed weakness. The Institute for Supply Management's manufacturing gauge dropped to 53.5 percent in May from 60.4 percent in April, marking the lowest level in 13 months. The monthly drop was never seen since 1984.
Meanwhile, the U.S. housing markets, which haven't shown any good sign since last recession, even dipped further. The S&P/Case-Shiller Home Price, which is regarded as the leading measure of U.S. Home prices, showed that the U.S. National Home Price Index declined by 4.2 percent to 125.41 in the first quarter of 2011, following a 3.6 percent drop in the fourth quarter of 2010.
The sluggish economic data raised concerns about economic prospects as investors worried that the U.S. economy might fell into a double-dip recession. The equity markets were hurt badly on Wednesday as three major stock indexes in New York markets tumbled more than 2 percent, biggest one-day drop since last December.
The rating agency Moody's on Thursday said that the risk of short-lived default is mounting if the United States does not raise its debt ceiling in coming month and warned to downgrade the U.S. Aaa sovereign ratings.
The risk-aversion appetite emerged in the markets and pushed up the price of treasury bonds. The 10-year Treasury bond's yields dipped to below 3 percent, first time this year, providing another evidence of the markets' rising fear.
The dollar, which is regarded as safe-haven investments when volatility increased in the markets, however, was down this week as the dollar index lost 2.4 percent this week.
Greece saw hope to resolve its deepening debt crisis as international agencies agreed on Friday to give out another financial aid. According to a joint statement, the next round of bailout funds for Greece from the International Monetary Fund, European Central Bank and European Commission may be available in early July.
Greece has also made commitments to accelerate a privatization program to raise about 50 billion euro, or 72 billion dollars by 2015, after it agreed on Thursday to cut its 2011 budget deficit by 6.4 billion euros.
The euro surged more than 1 percent by the hope of Greece debt problems on percent. The shared currency gained 2.1 percent against the dollar this week.
The dollar also lost ground against other currencies this week. It lost 1.1 percent against the Swiss franc and shed nearly 1 percent against the Japanese yen.
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