US dollar rallies after stronger-than-expected jobs report
U.S. nonfarm payrolls rose 272,000 in May
U.S. rate futures price in just one cut in 2024
Euro on pace for largest weekly loss since roughly early April
Adds new comment, U.S. jobs report, bullets, byline, NEW YORK dateline, FX table; update prices
By Gertrude Chavez-Dreyfuss and Amanda Cooper
NEW YORK/LONDON, June 7 (Reuters) -The U.S. dollar jumped on Friday after data showed the world's largest economy created a lot more jobs than expected last month, suggesting that the Federal Reserve could take time in starting its easing cycle this year.
U.S. nonfarm payrolls expanded by 272,000 jobs last month, data showed, while revisions showed 15,000 fewer jobs created in March and April combined than previously reported. Economists polled by Reuters had forecast payrolls advancing by 185,000.
The unemployment rate, however, edged up to 4% from 3.9% in April, breaching a level that had previously held for 27 straight months.
"This blockbuster NFP (nonfarm payrolls) makes it harder for the Fed to move towards a cut in rates," Giuseppe Sette, president of market research firm Toggle AI, wrote in emailed comments.
"The next few months will be interesting as the Fed will have to tussle with the stronger performance of the U.S. economy, limiting its ability to follow the example of the ECB and cut."
The dollar rose 0.7% against the yen to 156.775 JPY=EBS. The U.S. currency though was still down 0.2% on the week, on track for its worst weekly performance since late April.
The euro dropped 0.5% versus the dollar to $1.0832 EUR=EBS. On the week, Europe's single currency slipped 0.22%, its largest weekly percentage loss since the week starting April 8.
The currency's losses also came a day afterthe European Central Bank cut rates in a well-telegraphed move, but offered few hints about the outlook for monetary policy given that inflation is still above target.
The U.S. dollar index =USD, which tracks the currency against the euro and five other major rivals, rose 0.6% to 104.76.
For the week, the index was on track for a 0.1% gain, with the strong jobs number offsetting a run ofweaker macro data that had promptedinvestors to put two quarter-point Fed rate cuts back on the table for this year.
The Federal Open Market Committee is not expected to make any change at its policy meeting next week, but after the jobs data, the rate futures market has priced in just one cut of 25 basis points this year, either at the November or December meeting, according to LSEG's rate probability app.
Currency bid prices at 7 June 01:13 p.m. GMT | |||||||
Description | RIC | Last | U.S. Close Previous Session | Pct Change | YTD Pct | High Bid | Low Bid |
Dollar index | =USD | 104.68 | 104.11 | 0.57% | 3.27% | 104.78 | 103.99 |
Euro/Dollar | EUR=EBS | 1.083 | 1.089 | -0.55% | -1.88% | $1.0903 | $1.0821 |
Dollar/Yen | JPY=D3 | 156.71 | 155.95 | 0.51% | 11.14% | 156.87 | 155.14 |
Euro/Yen | EURJPY= | 1.083 | 169.44 | 0.18% | 9.05% | 169.97 | 168.95 |
Dollar/Swiss | CHF=EBS | 0.8958 | 0.8893 | 0.74% | 6.45% | 0.8964 | 0.8881 |
Sterling/Dollar | GBP=D3 | 1.2729 | 1.2791 | -0.47% | 0.04% | $1.2825 | $1.0821 |
Dollar/Canadian | CAD=D3 | 1.3716 | 1.367 | 0.32% | 3.45% | 1.3737 | 1.3663 |
Aussie/Dollar | AUD=D3 | 0.6605 | 0.6667 | -0.87% | -3.07% | $0.6681 | $0.6603 |
Euro/Swiss | EURCHF= | 0.9701 | 0.9683 | 0.19% | 4.47% | 0.9708 | 0.9678 |
Euro/Sterling | EURGBP= | 0.8505 | 0.8512 | -0.08% | -1.88% | 0.852 | 0.8503 |
NZ Dollar/Dollar | NZD=D3 | 0.6138 | 0.6201 | -1.01% | -2.86% | $0.6203 | 0.6135 |
Dollar/Norway | NOK= | 10.6461 | 10.5439 | 0.97% | 5.04% | 10.6597 | 10.5292 |
Euro/Norway | EURNOK= | 11.5307 | 11.4855 | 0.39% | 2.73% | 11.5382 | 11.4714 |
Dollar/Sweden | SEK= | 10.4882 | 10.3911 | 0.93% | 4.18% | 10.5018 | 10.3507 |
Euro/Sweden | EURSEK= | 11.3593 | 11.3143 | 0.41% | 2.11% | 11.3674 | 11.2748 |
World FX rates https://tmsnrt.rs/2RBWI5E
Reporting by Gertrude Chavez-Dreyfuss in New York and Amanda Cooper in London; Editing by Lincoln Feast, Alex Richardson and Andrew Heavens
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