By Joseph Adinolfi, MarketWatch , Rachel Koning Beals
Yen rises as oil prices slide
A stronger than expected March U.S. employment report sent the dollar higher against most of its developed and emerging-market rivals on Friday.
After weakening in the hours leading up to the data, the dollar abruptly turned after it was released at 8:30 a.m. Eastern Time, spurred by a strong headline number, and a better-than-expected reading on average hourly wage growth.
Wages grew 0.3% in March, after declining by 0.1% in February. Investors cheered the number as sign inflation will continue to trend higher.
Though the report wasn't entirely free of blemish. The unemployment rate crept higher to 5%, from 4.9% in the prior month, due to a rise in participation.
Read: U.S. adds 215,000 new jobs in March as more workers enter labor force (http://www.marketwatch.com/story/us-adds- 215000-new-jobs-in-march-as-more-workers-enter-labor-force-2016-04-01)
Jameel Ahmad, chief market analyst at FXTM, said the dollar's gains were limited by the fact that traders still expect only two interest rate increases from the Federal Reserve this year.
"This report gives us a little more confidence that the Fed will be on the right track," he said.
Ahmad said he's keeping a close eye on the euro-dollar pair as it nears $1.1350, a key technical level. If the shared currency finished the session below that level, it would suggest another leg lower looms.
The euro was at $1.1390 in recent trade, compared with $1.1381 late Thursday in New York. It traded as high as $ 1.1438 ahead of the data.
To start the year, the dollar lost some of its appeal amid falling interest rates. Lower U.S. yields undermined the dollar, and U.S.Treasury notes and bonds marked their best quarter in 4-1/2 years. As bond prices rise, their yields fall.
Read:Payrolls report may show march of workers back into the jobs market (http://www.marketwatch.com/story/payrolls- report-may-show-march-of-workers-back-into-the-jobs-market-2016-03-31)
The dollar strengthened against the yen immediately after the data, but quickly turned lower, falling to Yen112.00 in recent trade. It traded at Yen112.51 late Thursday.
The yen, a popular haven currency, benefited from a sharp drop in oil prices (http://www.marketwatch.com/story/oil- prices-continue-to-retreat-in-the-face-of-supply-rise-2016-04-01) and the attendant declines in other risky assets like stocks.
U.S.-traded crude oil futures were down nearly 4% in recent trade to $36.68 a barrel.
Beyond the jobs report, three economic reports are slated to arrive at 10 a.m. Eastern, covering construction spending in February, consumer sentiment in March and the March reading for the Institute for Supply Management's manufacturing index.
