Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) – The U.S. dollar rebounded on Friday after data showed the world’s largest economy added far more jobs than expected last month, suggesting the Federal Reserve may need time to get going this year. easing monetary policy.
The index, which tracks the currency’s value against six major currencies led by the euro, rose 0.8% to 104.91, its best daily gain since April 10.
The index was on track for a 0.2% gain on the week, with forceful jobs numbers offsetting a series of weaker macro data that had earlier prompted investors to reconsider the Fed’s two rate cuts in 2024.
The data showed that U.S. nonfarm payroll jobs increased by 272,000 last month, while revisions showed that a combined 15,000 fewer jobs were created in March and April than previously reported. Economists polled by Reuters forecast employment growth of 185,000.
Average hourly earnings rose 0.4% after slowing to 0.2% in April. Wages rose 4.1% in the 12 months to May, following an upwardly revised annual gain of 4.0% in the previous month.
However, the unemployment rate rose to 4% from 3.9% in April, exceeding the level it had previously held for 27 straight months.
“Markets and the Fed are bowing to the holy grail of a single number, and that is the payrolls report. Of course, it’s not just about the headline, but also about the higher-than-expected payroll amount,” said David Rosenberg, founder and president of Rosenberg Research in Montreal.
“But as they say, ‘it is what it is.’ And since we know what the Fed is focused on and how pervasive it is when it comes to stock and bond market activity, let’s consider this report pessimistic because it will simply embolden the hawks at the FOMC (federal Open Market Committee).”
The FOMC is not expected to make any changes at its policy meeting next week,
Based on labor market data, the interest rate futures market has priced in just one 25-basis-point cut this year, at the November or December meeting, according to the LSEG interest rate probability app.
The odds of a rate cut in September have fallen to about 50.8% after slowing from about 70% tardy Thursday.
The dollar rose 0.6% against the yen to 156.64. The U.S. currency continued to lose 0.4% on the week, hitting its worst weekly performance since tardy April, around the time Japanese monetary authorities moved in to support the yen.
Like the Fed, the Bank of Japan will decide on interest rate policy next week, and market consensus is building on an imminent reduction in monthly bond purchases to tighten lending conditions.
Despite recent stability, the yen remains near a 34-year low, above the 160-per-dollar level reached in tardy April, prompting Japanese officials to spend about 9.8 trillion yen ($62.9 billion) on currency market interventions to support it. .
Meanwhile, the euro fell 0.8% against the dollar to $1.0803. Europe’s single currency fell 0.4% this week, the biggest weekly percentage loss since the week of April 8.
The currency’s losses also came a day after the European Central Bank cut interest rates in a well-telegraphed move but gave little clue on the outlook for monetary policy given that inflation remains above target. Meanwhile, sterling fell 0.5% against the dollar to $1.2722 after hitting $1.2825 earlier in the session, its highest level since mid-March.
Currency
offer
prices
in 7
June
07:19
afternoon GMT
RIC Description Latest US Points since the beginning of the year High Low
ion Close Chang Pct Offer Offer
Previous
Session
Dollar 104.88 104.11 0.76% 3.46% 104.93 103
index .99
Euro/Dol 1.0803 1.089 -0.8% -2.13% 1.090 USD 1.
lar 3 080
1
Dollar/R 156.63 155.95 0.44% 11.05% 157.05 155
in .14
Euro/Yen 1.0803 169.44 -0.15 8.71% 169.97 168
% 0.95
Dollar/S 0.8964 0.8893 0.8% 6.52% 0.8972 0.8
I know 881
Sterling sterling 1.2719 1.2791 -0.54 -0.03% 1.282 USD 1.
/dollar % 5,080
1
Dollar/C 1.3749 1.367 0.59% 3.73% 1.3758 1.3
anadian 663
Australian/D 0.6582 0.6667 -1.25 -3.44% 0.668 USD 0.
look %1,658
1
Euro/Switzerland 0.9682 0.9683 -0.01 4.26% 0.9708 0.9
ss%678
Euro/Ste 0.849 0.8512 -0.26 -2.05% 0.852 0.8
rling%49
New Zealand 0.6107 0.6201 -1.46 -3.31% $0.620 0.6
Dollar/D% 3,106
look
Dollar/N 10.7092 10.5439 1.57% 5.66% 10.716 10.
orway 1 529
2
Euro/Nor 11.5681 11.4855 0.72% 3.08% 11.575 11.
road 2 471
4
Dollar/S 10.541 10.3911 1.44% 4.71% 10.548 10.
will be 350
7
Euro/Sweden 11.3863 11.3143 0.64% 2.35% 11.398 11.
1274
8
