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US dollar falls vs euro, yen after good US jobs report

Saturday, April 2, 2016 - 07:45

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The US dollar fell against the euro and yen Friday after a solid US jobs report was seen as not strong enough to spur the Federal Reserve into raising interest rates.

[NEW YORK] The US dollar fell against the euro and yen Friday after a solid US jobs report was seen as not strong enough to spur the Federal Reserve into raising interest rates.

The highly anticipated March jobs report from the Labor Department showed a better-than-expected 215,000 jobs were added, average hourly earnings rose 0.3 per cent and the unemployment rate inched up to 5 per cent, largely because more people entered the jobs market.

"Investors were disappointed by the increase in the unemployment rate," said Kathy Lien of BK Asset Management.

"Today's labor market numbers needed to be unambiguously positive to draw investors back to the dollar and unfortunately underlying weakness prevented the dollar from rallying."

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By the end of the session, the US dollar was trading at US$1.1393 per euro, slipping 0.1 per cent from the prior day. The greenback fell more sharply against the Japanese currency, losing 0.9 per cent at 111.63 yen.

Fed Chair Janet Yellen's dovish remarks in a speech earlier this week dampened appetite for the US currency as she suggested the central bank would move cautiously in raising rates given troubles in the global economy.

The prospect of continued low rates - the range of the federal funds rate was lifted to 0.25-0.50 per cent in December - has pushed investors to seek higher-yielding returns elsewhere.

Bloomberg News reported that the Bloomberg Dollar Spot Index, which tracks the greenback against 10 other major currencies, was little changed Friday. In March the index tumbled 3.9 per cent, the steepest drop in more than five years, after the Fed lowered its outlook for future rate hikes and Yellen adopted a more dovish tone.

AFP

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