Dollar gains after mixed jobs report
By Karen Brettell
NEW YORK (Reuters) — The dollar gained against the euro and Japanese yen on Friday after the August jobs report showed a still strong labor market, despite some signs of deterioration.
Employers added 187,000 jobs in August, above expectations for a 170,000 gain. But data for July was revised lower to show 157,000 jobs added instead of the previously reported 187,000.
The unemployment rate rose to 3.8%, above the expected 3.5%. Average hourly earnings rose by 4.3% for the year, below expectations for a 4.4% gain.
“Today's jobs report provides investors the best of both worlds. It's the labor market softening just enough to keep the Fed at bay while it's strong enough to prevent an economic recession," said Michael Arone, chief investment strategist at State Street (NYSE:STT) Global Advisors in Boston.
The dollar index was last up 0.58% at 104.23. It is up 0.08% on the week, overcoming price drops earlier in the week caused by softening economic data.
The euro fell 0.59% to $1.0779, down 0.13% on the week against the U.S. currency.
The greenback rose 0.42% to 146.145 Japanese yen, after earlier falling to 144.44, the lowest since Aug. 11. It is down 0.12% on the week after dropping from a 10-month high of 147.375 on Tuesday.
Fed funds futures traders are now pricing in a 93% likelihood that the Federal Reserve will leave rates unchanged at its September meeting and see only a 36% chance of a hike in November, according to the CME Group's (NASDAQ:CME) FedWatch Tool.
Fed Bank of Cleveland President Loretta Mester said on Friday that the U.S. labor market remains strong despite signs of it coming into better balance, while noting future interest rate decisions will be made based on incoming data.
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