Dollar dips against euro as jobs gains offset by negative revisions By Reuters

Written by Karen Britel

NEW YORK (Reuters) – The dollar eased previous gains against the euro but remained strong against the yen on Friday after job gains and wage growth for April beat economists’ expectations but showed downward revisions to jobs for March.

Employers added 253,000 jobs, exceeding economists’ expectations of a gain of 180,000 jobs. Average hourly earnings in the US increased at an annual rate of 4.4%, which was higher than expectations for a 4.2% increase.

However, data for the month of March was also revised lower to show the addition of 165K jobs instead of the 236K previously reported.

“Maybe the headline number is not as strong as it seems given previous reviews,” said Vasily Serebryakov, a forex strategist at UBS in New York.

He added that the dollar’s initial rally was likely in part due to investors being bid on the currency, or betting on its decline, and covering their positions.

The dollar fell from a 20-year high last September as investors adjusted to the possibility that the Federal Reserve was at or near the end of its tightening cycle, while peers including the European Central Bank became more hawkish.

Investors are pricing in the possibility that the Federal Reserve will cut interest rates in the second half of this year. However, while the economy is slowing, pockets of strength remain, making investors reluctant to take any further bearishness on the greenback for the time being.

“In the near term, it’s hard to get a lot of momentum until we get a clearer directional signal from the US data,” Serebryakov said. “For us, the decision ultimately comes down to persistently weaker US data, eventual dollar weakness and a more dovish Fed.”

Federal Reserve fund futures traders are pricing in about 75 basis points for cuts by the end of the year. The Fed raised interest rates by 25 basis points to 5% to 5.25% on Wednesday and eased the language of its policy statement saying it “expects” that more rate increases will be needed.

It reached a session high of 101.77 before retreating to 101.19, down 0.13% on the day. The euro fell to $1.0967, before rebounding to $1.1026, up 0.11%.

The dollar rose 0.40% to 134.79 Japanese yen.

Technical analysts at JPMorgan (NYSE: including Jason Hunter) noted on Friday that there are bearish divergences on the daily chart and that the single currency’s gains have stalled, but that the rally is “not yet decisively over.”

The bank said that if the euro sees sustained weakness below the levels of $1.0909 and $1.0831, it would confirm a short-term trend reversal, while a drop below $1.0762 would “indicate a more important trend reversal in the making.”

The euro also fell against the British pound, to 87.11 pence on Friday, the lowest level since December 20.

Consumer price data due next week is the next major economic focus in the US.

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The currency bid prices at 3:00 pm (1900 GMT)

Description RIC Last US Close Pct Change YTD Pct High Bid Low Bid

previous change

a class

Dollar index 101.1900 101.3400 -0.13% -2.222% +101.7700 +101.1100

EUR/USD 1.1026 USD 1.1014 + 0.11% + 2.90% + 1.1048 USD + 1.0967 USD

USD/JPY 134.7900 134.2650 +0.40% +2.82% +135.1150 +133.8800

EUR/JPY 148.63 147.87 +0.51% +5.93% +148.7000 +147.6900

USD/CHF 0.8904 0.8859 +0.51% -3.70% +0.8972 +0.8836

GBP/USD 1.2641 USD 1.2575 USD + 0.54% + 4.54% + 1.2652 USD + 1.2559 USD

USD/CAD 1.3373 1.3540 -1.24% -1.30% +1.3539 +1.3371

AUD/USD 0.6755 USD 0.6694 +0.92% -0.90% + 0.6757 USD + 0.6689 USD

EUR/CHF 0.9815 0.9756 +0.60% -0.79% +0.9849 +0.9754

EUR/GBP 0.8722 0.8759 -0.42% -1.38% +0.8767 +0.8714

0.6301 USD 0.6279 +0.36% -0.76% + 0.6316 NZD + 0.6265 NZD

dollars / dollars

Dollar / Norway 10.5610 10.6910 -1.22% + 7.61% +10.6870 +10.5610

Euro / Norway 11.6447 11.7663 -1.03% +10.97% +11.7903 +11.6400

Dollar / Sweden 10.1527 10.2431 -0.75% -2.45% +10.2621 +10.1510

Euro / Sweden 11.1960 11.2807 -0.75% + 0.41% +11.2945 +11.1920