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Dollar catches a bid after US payrolls data beat expectations

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The dollar was broadly bid on Thursday by a stronger-than-expected nonfarm payrolls report for June, with the euro weakening after the European Central Bank held firm on monetary policy on Thursday as expected.

The U.S. economy added 288,000 new jobs last month, data showed, which pushed the unemployment rate to its lowest in nearly 6 months. That helped drive benchmark U.S. Treasury yields to their highest in over a week at 2.66 percent, which in turned supported the dollar against a basket of major currencies.

Strong figures from payrolls processor ADP on Wednesday supported the view that the U.S. economy has bounced back after a first-quarter slump.

The euro, hurt by the ECB's decision to hold firm on interest rates, sank to near $1.36. Against the yen, the dollar bought about 102 yen.

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The Swedish crown fell to a 3½-year low against the euro on Thursday as the central bank cut rates more than expected, while the Australian dollar lost ground after the head of its central bank chief warned the currency could weaken.

The 50-basis-point-cut by Stockholm's Riksbank was double what was expected and kept the market focus on the crown in an otherwise quiet session, with investors awaiting U.S. jobs data and the outcome of a European Central Bank policy meeting.

The Riksbank surprised a market that was expecting only a 25 bps cut in the repo rate, and the Swedish crown fell to its lowest since November 2010 against the euro. The euro was up 2 percent, rising to more than 9 crowns.

Another big mover was the Australian dollar which extended losses to trade 0.8 percent lower under $0.94.

--By Reuters, with CNBC.com

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