By Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) -The U.S. dollar was down on Friday but trimmed some losses against the euro and yen after data showed the world’s largest economy added more new jobs than expected last month, reflecting a labor market that remained on stable footing.
The report reinforced expectations that the Federal Reserve will hold interest rates steady for the next few meetings and not cut them until probably the summer.
U.S. data showed nonfarm payrolls increased by 177,000 jobs last month after rising by a downwardly revised 185,000 in March. Economists polled by Reuters had forecast 130,000 jobs added last month after a previously reported 228,000 gains in March.
The report, however, does not reflect the full impact of the tariffs imposed on the so-called Liberation Day on April 2. Economists expect jobs growth to slow or even contract in the coming months once the fallout from the punitive tariffs is taken into account.
“The data for this release was collected during the week following Liberation Day, meaning it would be too soon to expect substantial fallout to emerge just as higher tariffs were being implemented,” wrote Jeff Schulze, head of economic and market strategy at ClearBridge Investments, in emailed comments.
“As a result, investors are likely to look through this positive print, viewing it as a ‘calm before the storm’ with strength being downplayed given the known headwinds that the labor market will be facing in the coming months.”
Following the jobs report, the dollar cut some of its losses against the yen, still trading lower on the day. It was last down 0.6% at 144.52 yen . The euro, meanwhile, pared gains versus the greenback, still trading higher at $1.1326, up 0.3%.
The U.S. rate futures market trimmed bets that the Fed will cut rates as soon as June, after the payrolls data, giving it a 50% probability. That was down from about a 60% chance before the report’s release. Overall, the market has reduced the size of rate cuts being priced in to 85 basis points (bps), or about three rate reductions of 25 bps each. Over the last few days, rate futures had factored in about 100 bps of easing.
Currency
bid
prices at
2 May
01:16
p.m. GMT
Descripti RIC Last U.S. Pct YTD Pct High Low
on Close Change Bid Bid
Previous
Session
Dollar 99.786 100.14 -0.35% -8.02% 100.32 99.6
index 25
Euro/Doll 1.1329 1.1291 0.35% 9.44% $1.1355 $1.1
ar 275
Dollar/Ye 144.46 145.4 -0.66% -8.21% 145.91 144.
n 35
Euro/Yen 163.68 164.17 -0.3% 0.28% 164.63 163.
61
Dollar/Sw 0.8267 0.8295 -0.36% -8.92% 0.8316 0.82
iss 06
Sterling/ 1.3295 1.3277 0.17% 6.33% $1.3322 $1.3
Dollar 265
Dollar/Ca 1.3811 1.3854 -0.29% -3.94% 1.3854 1.38
nadian 04
Aussie/Do 0.6449 0.6383 1.07% 4.26% $0.6453 $0.6
llar 382
Euro/Swis 0.9366 0.9359 0.07% -0.29% 0.9384 0.93
s 13
Euro/Ster 0.8521 0.8501 0.24% 3% 0.8537 0.84
ling 91
NZ 0.5954 0.5908 0.82% 6.44% $0.5958 0.59
Dollar/Do 04
llar
Dollar/No 10.3508 10.4119 -0.59% -8.93% 10.4507 10.3
rway 478
Euro/Norw 11.7268 11.7589 -0.27% -0.36% 11.8048 11.7
ay 206
Dollar/Sw 9.6372 9.7258 -0.91% -12.53% 9.766 9.63
eden 06
Euro/Swed 10.9174 10.9989 -0.71% -4.77% 11.0206 10.9
en 058
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Mark Potter and Susan Fenton)
