Investors sell off US currency in hunt for better returns after positive jobs report

Employment report sends investors away from dollar

NEW YORK — Gains made by the dollar overnight were mostly erased Thursday after a steep drop in unemployment claims in the U.S. provided the latest encouraging sign about the nation’s economy.

Added confidence that the domestic economy will continue to grow, albeit slowly, was enough to send investors out of the relative safety of the dollar in search of better returns.

The euro climbed back above $1.27 against the dollar in midday trading in New York after falling below that threshold earlier in the day. The euro bought $1.2721, up from a low of $1.2665 and nearly unchanged from Wednesday’s close of $1.2723.

The British pound also moved off its lows against the dollar following the employment report. It rose to $1.5455 from a morning low of $1.5376. It closed Wednesday at $1.5471.

The U.S. Labor Department said first-time claims for unemployment benefits fell sharply last week to 451,000, backing up signs that the jobs market has improved modestly in the past few weeks. A report Friday showed private employers added more workers in August than anticipated.

Unemployment claims still haven’t fallen enough to indicate strong jobs growth or a robust economy in the U.S, but they seem to have diminished worries the country will fall back into recession.

The dollar fell to 83.80 Japanese yen, just above the 15-year low touched earlier this week.