© Reuters. FILE PHOTO: US dollar and Japanese yen banknotes are seen in this illustration June 2, 2017. REUTERS/Thomas White/Illustrative
Written by Karen Britel
NEW YORK (Reuters) – The dollar rose after a strong March jobs report on Friday added to expectations that the Federal Reserve will raise interest rates again in May, while the Japanese yen weakened as new BOJ Governor Kazuo Ueda signaled he was in no rush to Connect to her massive motivation.
US employers maintained a strong pace of hiring in March, adding 236,000 jobs, pushing the unemployment rate back down to 3.5% and pointing to a resilient labor market that will keep the Federal Reserve on track to raise interest rates again next month.
“In my view, the market sentiment pendulum will swing in favor of a Fed rate hike early next month,” said Mark Chandler, chief market strategist at Bannockburn Global Forex in New York, noting that momentum indicators for dollar currency pairs are “overstretched” and likely to Dollar strength is favored in the near term.
The latest rise was 0.67% against a basket of currencies at 102.68, the highest level since April 3. The euro fell 0.51% to $1.0841, the lowest level since April 3.
Wednesday’s consumer price data is the main economic focus in the US this week and is expected to show headline inflation rose 0.3% in March, while core inflation rose 0.4%.
Traders are also closely watching data on bank lending after the collapse of a Silicon Valley bank in mid-March raised concerns about bank contagion and prompted government and Federal Reserve interventions to shore up liquidity in the sector.
We know from the Fed’s perspective that price pressures remain elevated and the labor market remains strong. “That hasn’t really changed,” Chandler said, “what has changed is the bank’s behavior.”
The latest Fed data shows that commercial and industrial loans at commercial banks fell to $2.756 trillion in the week ending March 29, from $2.824 trillion in the week ending March 15.
Fed fund futures traders are currently pricing in the 70% chance that the Fed will raise interest rates by an additional 25 basis points at its May 2-3 meeting.
The dollar rose against the Japanese yen after the new BoJ governor, Kazuo Ueda, said it was appropriate to maintain the bank’s ultra-loose monetary policy for the time being as inflation has not yet reached 2% as a trend.
The dollar was last up 1.00% to 133.45 yen, the highest level since April 3.
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Coin bid prices at 9:44 am (1344 GMT)
Description RIC Last US Close Pct Change YTD Pct High Bid Low Bid
previous change
a class
Dollar index 102.6800 102.0200 +0.67% -0.783% +102.7100 +101.9800
EUR/USD 1.0841 USD 1.0898 -0.51% + 1.18% + 1.0917 USD + 1.0840 USD
USD/JPY 133.4500 132.1450 +1.00% +1.79% +133.4600 +131.8400
EUR/JPY 144.68 144.14 +0.37% +3.12% +144.8000 +143.8200
USD/CHF 0.9106 0.9055 +0.55% -1.53% +0.9107 +0.9039
GBP/USD $1.2356 $1.2412 -0.44% + 2.18% + $1.2442 + $1.2346
USD/CAD 1.3543 1.3520 +0.16% -0.05% +1.3553 +1.3485
AUD/USD 0.6623 USD 0.6674 -0.80% -2.88% + 0.6680 USD + 0.6621 USD
EUR/CHF 0.9873 0.9864 +0.09% -0.22% +0.9888 +0.9859
EUR/GBP 0.8772 0.8783 -0.13% -0.81% +0.8791 +0.8769
0.6197 NZD 0.6276 NZD -1.25% -2.40% + 0.6256 NZD + 0.6195 NZD
dollars / dollars
Dollar / Norway 10.5380 10.5020 +0.38% +7.42% +10.5540 +10.4610
Euro / Norway 11.4256 11.4420 -0.14% +8.88% +11.4630 +11.4013
Dollar / Sweden 10.5425 10.4560 +0.26% +1.29% +10.5445 +10.4501
Euro / Sweden 11.4238 11.3946 +0.26% +2.50% +11.4353 +11.3985
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