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U.S. economy creates 236,000 new jobs; dollar rises
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U.S. rate futures price in 25-bps hike in May
(Adds comment, byline, FX table, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, April 7 (Reuters) - The dollar strengthened on Friday after data showed an increase in
jobs in the world's largest economy last month, suggesting that the Federal Reserve may have to raise
interest rates next month.
Prior to the jobs report, the rate futures market had been betting that the Fed would pause at the May
policy meeting. The market has now priced in a 68% chance the Fed will raise interest rates by 25 basis
points (bps).
Friday's data showed there were
236,000 new jobs in March, in line with forecasts of 239,000. Data for February was revised higher to show 326,000 jobs were added instead of 311,000 as previously reported.
"This lunchtime's U.S. labor market data was broadly in line with expectations and supportive of the view that the jobs market remains remarkably solid despite continued Fed tightening and financial stability concerns," said Michael Brown, market analyst, Traderx in London. "The Fed will look positively on a further rise in participation to a new cycle high 62.6%, while a renewed drop in unemployment to 3.5% coupled with continued healthy headline jobs growth should cement the case for another 25 bps rate hike at the May meeting."
In mid-morning trading, the dollar index rose 0.2% to 102.05 . Against the yen, the dollar was up 0.3% at 132.075 yen while the euro was 0.2% weaker at $1.0905 .
======================================================== Currency bid prices at 9:09AM (1309 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change
Session
Dollar index 102.0400 101.9100 +0.14% -1.401% +102.3000 +101.8700
Euro/Dollar $1.0907 $1.0921 -0.12% +1.80% +$1.0922 +$1.0876
Dollar/Yen 132.1000 131.7700 +0.25% +0.75% +132.3650 +131.5200
Euro/Yen 144.07 143.88 +0.13% +2.69% +144.1700 +143.6000
Dollar/Swiss 0.9062 0.9045 +0.23% -1.95% +0.9080 +0.9037
Sterling/Dollar $1.2418 $1.2438 -0.14% +2.70% +$1.2455 +$1.2390
Dollar/Canadian 1.3499 1.3493 +0.06% -0.35% +1.3530 +1.3487
Aussie/Dollar $0.6677 $0.6673 +0.04% -2.06% +$0.6691 +$0.6641
Euro/Swiss 0.9885 0.9879 +0.06% -0.10% +0.9890 +0.9864
Euro/Sterling 0.8781 0.8777 +0.05% -0.71% +0.8790 +0.8766
NZ $0.6251 $0.6245 +0.12% -1.54% +$0.6270 +$0.6210
Dollar/Dollar
Dollar/Norway 10.4800 10.4410 +0.41% +6.83% +10.5140 +10.4540
Euro/Norway 11.4310 11.3992 +0.28% +8.93% +11.4640 +11.4025
Dollar/Sweden 10.4488 10.4224 +0.08% +0.39% +10.4762 +10.4219
Euro/Sweden 11.3979 11.3883 +0.08% +2.23% +11.4045 +11.3787
(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Saqib Iqbal Ahmed; Editing by David Goodman and Mark Porter)
rm://gertrude.chavez.reuters.com@reuters.net))