Dollar falls after U.S. March jobs data

NEW YORK - The dollar fell against the euro and yen on Friday in volatile trading with investors seeing both positive and negative impacts in the U.S. jobs report for March.

By (Reuters)

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Published: Fri 4 Apr 2008, 9:34 PM

Last updated: Sun 5 Apr 2015, 11:35 AM

Government data showed U.S. employers cut payrolls for a third straight month in March, which some investors took as increasing the chance of more aggressive U.S. interest rate cuts which undermine demand for the dollar.

The drop of 80,000 jobs in the March non-farm payrolls report was the biggest monthly decline in five years as the economy headed into a downturn.

“The payrolls number confirms what many people know about the U.S. economy -- that it is weakening,” said Adam Fazio, a currency strategist at CIBC World Markets, New York.

The euro was last up 0.3 percent at 1.5723 but well off March’s record peak above $1.59.

The dollar was down 0.4 percent against the yen at 101.86 yen, still on track for its biggest weekly percentage gain since February 2004 at current prices.

The dollar fell 0.2 percent against a basket of six currencies to 71.988, and down 0.4 percent at 1.0056 Swiss francs.

The dollar at first tumbled on the report but even as it fell, some foreign exchange analysts were suggesting the dollar’s downward momentum would be short-lived. Briefly that proved correct with the dollar moving back into positive territory against the yen before resuming its decline.

“While (the data) is weaker than expected, the report is not especially alarming,” said Brian Dolan, chief currency strategist, at in Bedminster, New Jersey. “This is likely to keep risky assets from collapsing after the initial shake-out lower.”

Has the fed done enough?

Overall, investor sentiment has improved in recent sessions, and futures traders are now expecting only a 25 basis point rate cut from the Federal Reserve this month.

The Fed has slashed rates since September by a total of 3 percentage points to 2.25 percent to deal with the credit crisis and shield the economy from an ailing housing sector.

Late on Thursday, San Francisco Fed President Janet Yellen echoed comments on the economy made by Fed Chairman Ben Bernanke earlier this week, saying the U.S. economy has “all but stalled and could contract” in the first half of 2008.

Elsewhere, the Australian dollar managed a 0.3 percent gain against its U.S. counterpart despite February retail sales in Australia unexpectedly dipping 0.1 percent from the previous month.

Reserve Bank of Australia Governor Glenn Stevens said on Friday that growth in domestic demand was moderating despite uncomfortably high inflation, suggesting that interest rates had risen enough for now.

In addition, the dollar was up 0.2 percent against the Canadian dollar after an early Canadian government report showed that Canada’s unemployment rate rose more than expected, fueling expectations for rate cuts from the Bank of Canada.

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