In the currency market, the dollar edge higher against the euro. Late Thursday, the euro was trading at $1.571 vs. $1.588 on Wednesday.

The dollar’s strength was pretty counterintuitive on a day in which the numbers lined up pretty fully against it.

First the European Central Bank, as widely expected, hiked interest rates a quarter point to 4.25%.

The widening of the rate spread between the U.S. and the eurozone would be expected to have a negative impact on the euro/dollar ratio. However, those reading the tea leaves of rhetoric were dismayed, as ECB President Trichet repeatedly emphasized he had “no bias” on interest-rate policy. Trichet uttered none of the words used in the past to signal that a further rate hike is on the way.

“The market was highly disappointed by the fact that Trichet repeated at least five times he had no bias,” said Kathy Lien, of DailyFX.com. “Further rate hikes seems to be on the tip of his tongue, but Trichet does not want to spook the markets right now which is why he is simply leaving the door open for another rate hike this year.”

The other big negative was the Labor Department’s non-farm employment report, which showed that the U.S. economy shed 62,000 jobs in June. That was even worse than the 40,000 job loss expected by economists. And the unemployment rate remained at 5.5%, also worse than expected.

A broader measure of unemployment that includes discouraged workers rose from 9.7% to 9.9%, the highest in four years.

But the grim data, which strongly suggests the Fed may be unable to raise interest rates, at least in the near term, failed to push the buck down. Who knows why.

Source: Buck Holds Despite Countervailing Factors