Bloomberg News, sent from my iPhone. Dollar Gains After Jobless Rate Dips Even as Storms Cap Payrolls

Feb. 4 (Bloomberg) -- 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.

Canada’s currency touched a two-year high versus the dollar as the nation’s employment rose more than four times economists’ forecasts. Egypt’s pound held near a six-year low as protesters proclaimed the “day of departure” for President Hosni Mubarak. The greenback climbed against most its major counterparts as benchmark Treasury yields rose on the U.S. jobs data, making dollar-denominated assets more attractive.

“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 in New York. “Risk appetite today will be hard to determine as events in Egypt unfold.”

The dollar appreciated 0.4 percent to $1.3581 per euro at 5 p.m. in New York, from $1.3634 yesterday, after touching $1.3544, the strongest level since Jan. 24. The dollar climbed 0.7 percent to 82.18 yen, from 81.63. The euro gained 0.3 percent to 111.62 yen, from 111.29.

U.S. unemployment unexpectedly dropped to 9 percent last month from 9.4 percent in December, the Labor Department said today in Washington. Employers added 36,000 workers, the smallest gain in four months, after a 121,000 rise that was larger than initially reported.

Drop in Treasuries

Treasuries fell, pushing 10-year note yields to 3.64 percent, the highest level since May 3. Thirty-year bond yields touched 4.74 percent, the highest since April 15.

The Swiss franc fell against all its major counterparts after the U.S. and Canadian employment reports, dropping as much as 1.5 percent against the dollar to 95.94 centimes.

The currency, perceived as a haven, declined 0.6 percent to 1.2973 against the euro after a report showed yesterday that Europe’s services and manufacturing industries expanded at the fastest pace in nine months in January.

Egypt’s stock market and banking system remained closed amid anti-government protests, shielding the Egyptian pound, which touched 5.8585 against the dollar on Jan. 31, the weakest since January 2005.

The Suez Canal, which carries about 8 percent of global maritime trade, was operating normally today, Egyptian authorities said. Israel’s shekel dropped 0.3 percent to 3.7196.

The euro weakened 0.2 percent versus the dollar during the week as European Union leaders met in Brussels to try to narrow differences on ending the region’s debt crisis.

Debt Safety Net

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 17-nation currency may fall 2.3 percent to $1.3246 if it weakens below $1.3498, said George Davis, chief technical analyst for fixed income and currency strategy at Royal Bank of Canada in Toronto, in a phone interview.

“That is the pivot point for bullish and bearish sentiment,” Davis said. “If that level breaks on the downside, some of the people that had positioned in medium- to long-term positions in the euro are going to start to cash in and exit.”

Canada’s currency appreciated 0.4 percent to 98.73 cents per U.S. dollar on the nation’s job gains after touching 98.32 cents, the strongest level since May 2008. The loonie advanced 1.1 percent to 83.24 yen.

Canadian Jobs

Statistics Canada reported that employment rose by 69,200, compared with the median forecast of 15,000 in a Bloomberg News survey of 26 economists. The jobless rate rose to 7.8 percent from 7.6 percent. Full-time employment rose by 31,100 in January, and part-time jobs increased by 38,000.

“It’s a blowout number,” said C.J. Gavsie, managing director for foreign-exchange trading at Bank of Montreal’s BMO Capital Markets in Toronto. “What we need to see is this part- time significant increase move more into the full-time area.”

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 fell 1.3 percent 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 percent.

Bernanke on Economy

Fed Chairman Ben S. Bernanke said yesterday in a speech in Washington 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.

Bad weather prevented 886,000 Americans from going to work in the January survey week, the Labor Department’s survey of households showed today. That compares with an average of 282,000 over the previous five Januarys.

Economists at Morgan Stanley said before the report a figure around 475,000 would be consistent with about a 50,000 reduction in overall payrolls.

To contact the reporters on this story: Allison Bennett in New York.