A stronger than expected March U.S. employment report sent the dollar higher against most of its developed and emerging-market rivals on Friday.
The ICE U.S. dollar DXY, +0.15% a measure of the buck’s strength against a basket of rival currencies, was up 0.1% at 94.6500 after the data, reversing a decline from earlier in the session.
After weakening in the hours leading up to the data, the dollar abruptly turned after the data 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.
Read: U.S. adds 215,000 new jobs in March as more workers enter labor force
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 EURUSD, -0.0264% 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
The dollar USDJPY, -0.47% strengthened against the yen immediately after the data, but quickly turned lower, falling to ¥111.95 in recent trade. It traded at ¥112.51 late Thursday.
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.
