The dollar slipped again on Friday after recording its weakest quarter in 5 1/2 years, with investors doubtful that monthly U.S. jobs data will convince them to bring forward their bets on when the Federal Reserve will raise interest rates.
U.S. employment increased solidly in March and wages rebounded, underscoring the economy's resilience, but the Federal Reserve is expected to remain cautious in raising interest rates this year due to slowing global growth. Non farm payrolls increased 215,000 last month, the Labor Department said on Friday. Data for January and February were revised slightly down to show 1,000 fewer jobs created than previously reported.
Payroll gains were ahead of expectations for March as employers added 215,000 employees. Ahead of the report market forecasters surveyed by Bloomberg estimated a monthly gain of 205,000. The unemployment rate advanced by one-tenth to 5.0% as more people were drawn to the labor force.
It’s been a shaky start to the European session on Thursday, despite the data from the UK and the euro area in the morning being broadly positive. We’re also headed into the business end of the week, with U.S. jobs report being released tomorrow as well as some data and speeches from Fed officials later today.
The U.S. dollar fell to its lowest level in five months against the euro on Thursday in trade dominated by month-end rebalancing flows, putting the dollar index on track for its worst quarterly performance in five years.
With Fed Chair Janet Yellen’s comments on March 29 having appeared to have left little chance of a rate hike in April, or even until later in the year, it will be interesting to see how the markets respond to this week’s employment data. Quite often the jobs report is seen to be influential in determining whether the Fed will hold or act at the next policy meeting, but Yellen’s comments indicated that another rate hike is not imminent.