Dollar Gains Most in 6 Weeks as Jobs Increase Beats Forecast
New York (May 2) The dollar rose the most in six weeks against a basket of major peers after a government report showed employers boosted payrolls in April by the largest amount in two years and the jobless rate plunged.
The greenback gained to the highest level in almost a month versus the yen as nonfarm payrolls increased 288,000, compared with a forecast of 218,000 in a Bloomberg survey of 94 participants. Emerging-market currencies dropped on speculation the employment gains will speed the timetable for the Federal Reserve to pare monthly bond-buying and raise interest rates. A measure of market volatility rose from almost a seven-year low.
“The numbers look genuinely solid in every respect, so the dollar higher across the board seems like a perfectly reasonable reaction,” Adam Cole, head of Group of 10 currency strategy at Royal Bank of Canada, said by phone from London. “The market is bringing froward its expectations for Fed tightening, or at least has more confidence rates will rise in the U.S., so the dollar is rising as a result.”
The Bloomberg Dollar Spot Index, which monitors the greenback against 10 major counterparts, rose 0.3 percent to 1,011.00 at 9:53 a.m. New York time after gaining as much as 0.4 percent, the most since March 19. The increase wiped out a weekly drop.
The dollar climbed 0.5 percent to 102.82 yen and touched 103.02, the highest since April 8. It advanced 0.4 percent to $1.3819 per euro after weakening to $1.3889 yesterday, the least since April 11. The common currency rose 0.1 percent to 142.04 yen.
Emerging Markets
A custom Bloomberg index of the 20 most-traded emerging-market currencies fell 0.1 percent to 92.2766 to snap a four-day streak of gains. It is up 0.5 percent this week.
Poland’s zloty and the Russian ruble declined the most in developing markets, falling 0.6 percent. Colombia’s peso rose 0.4 and Indonesia’s rupiah added 0.3 percent.
The rupiah was set for its first weekly advance in a month as data today showed inflation slowed in April to the least since June and exports exceeded imports for a second month in March.
“The fundamentals are improving and investors are chasing real interest rates offered by Indonesian bonds as inflation slows,” said Mika Martumpal, the head of treasury research and strategy at PT Bank CIMB Niaga in Jakarta. “As long as the trade balance is in surplus, the rupiah should be supported.”
