New York in April (UNA): The dollar rose on Friday after data showed an increase in jobs in the world’s largest economy last month, suggesting the Federal Reserve may have to raise interest rates next month.
Ahead of the jobs report, the rate futures market was betting that the Fed would pause at the May policy meeting. Reuters reports that the market now has a 68% probability that the Fed will raise interest rates by 25 basis points.
Friday’s data showed 236,000 new jobs were added in March, in line with expectations of 239,000. February data was revised upward to show that 326,000 jobs were added instead of 311,000 previously reported.
“US labor market data at lunchtime was broadly in line with expectations and supportive of the view that the labor market remains remarkably strong despite continued Fed tightening and financial stability concerns,” said Michael Brown, Market Analyst, Traderx in London. . “The Fed would view positively a further increase in participation to a new cycle high of 62.6%, while a renewed decline in unemployment to 3.5% coupled with continued healthy key job growth should strengthen the case for another 25 basis point rate hike. At the May meeting…”
In mid-morning trade, the dollar index was up 0.2%, at 102.05. Against the yen, the dollar rose 0.3% to 132.075 yen, while the euro fell 0.2% at $1.0905.
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