The dollar strengthened against the yen this Fridayafter US job and wage growth in April topped economists’ forecasts, but showed a downward revision to employment in March.
US employers added 253,000 jobs, above economists’ forecasts for an increase of 180,000. Median hourly earnings rose at an annual rate of 4.4%, above expectations of 4.2%.
However, data for March was revised downward to show 165,000 jobs added, instead of the 236,000 previously reported. “The headline figure is likely not as strong as it seems, given the downward revisions,” said Vassili Serebriakov, of UBS in New York.
The dollar’s initial rally after the data may also have been partly due to investors who were short the greenback, or who were betting it would fall, hedging their positions, he added.
The dollar has fallen from a 20-year high in September as investors see it as likely that the Federal Reserve is nearing the end of its monetary tightening cycle and may start cutting interest rates if the economy continues to slow.
However, there are still pockets of strength, making investors hesitant to be too bearish on the currency for now.
The dollar index reached a session high of 101.77, before falling 0.13% to 101.19. The euro fell to $1.0967, but was then up 0.11% at $1.1026. The greenback was up 0.40 to 134.79 yen.
Inflation data to be released next week is the next focus of attention for the US economy.
Source: Ambito
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