Currencies

[thepennyking]

Dollar Surges on Strong U.S. Jobs Data
Friday April 2, 9:03 am ET
By Manuela Badawy


NEW YORK (Reuters) - The dollar surged against major currencies on Friday as a much stronger than-expected March U.S. employment report signaled that the U.S. economy is on a firmer path to recovery.
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The robust number indicated the U.S. labor market was firmer than previously thought, which, if sustained, could enable the Federal Reserve to start raising interest rates from their current 1958 low of 1 percent.

Rate increases would be widely viewed by analysts as a bullish prospect for the dollar because it would burnish the allure of dollar-denominated assets for foreign investors.

The euro dived more than 1 percent against the dollar to session lows around $1.2120 (EUR=). The dollar rose to 104.71 yen(JPY=) from a session low of 103.67 yen.

Against the Swiss franc, the dollar rose 1.3 percent to session highs around 1.2848 francs(CHF=). Sterling fell more than 1 percent against the dollar to $1.8272.

Non-farm payrolls climbed 308,000 in March, the Labor Department said, the biggest gain since April 2000 and well above the 103,000 rise expected on Wall Street.

The unemployment rate ticked up to 5.7 percent from the two-year low of 5.6 percent seen in January and February.

"Very strong and a big surprise. Just confirmed rumors of a strong number. The dollar jumped even before the data so somebody must have known about the strong figures," said Shaun Osborne, chief currency strategist, Scotia Capital in Toronto.

"Gains in jobs were in the services sector. This is supportive for the dollar going forward. But the Fed needs consistently strong jobs reports before it can raise rates," he said.

(Additional reporting by Gertrude Chavez)