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Dollar rises as US jobs data leaves rate hike at bay
[NEW YORK] The dollar edged up against the euro on Friday after a solid US jobs report that seemed to discount the likelihood of a Federal Reserve interest rate hike in June.
The US economy added 223,000 jobs in April, bouncing back from a mere 85,000 in March, the Labor Department reported, roughly in line with the consensus estimate.
While the unemployment rate ticked down to 5.4 per cent, a seven-year low, the details in the report showed only slight signs of a tightening labor market.
The Federal Reserve is particularly focused on the labor market's strength in deciding when to raise the benchmark federal funds rate, pegged at the zero bound since late 2008 to support the recovery from the Great Recession. The US central bank has indicated the rate liftoff could come as early as June but the decision would be data-dependent.
"Even though forex traders were disappointed, the Federal Reserve has no reason to change their plans to raise rates in 2015 after today's report. It wasn't a great release but it wasn't terrible either and we believe the data reinforces our view that liftoff will be September," said Kathy Lien of BK Asset Management.
The pound, meanwhile, advanced after the stunning upset election victory in Britain of Prime Minister David Cameron's Conservatives.
"The Conservatives are seen as being more business friendly and more importantly, offer continuity in a country that last year experienced the fastest rate of growth in the G7," said Craig Erlam, senior market analyst at forex trader Oanda.