Forex – Dollar Hits Fresh 4-Month High After Mixed Jobs Report

© Reuters. Dollar returns to 4-month highs – The dollar marked a fresh four-month high against major rivals on Friday after the release of the monthly nonfarm payrolls.

At 11:17AM ET (15:17GMT), the , which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.34% to 92.59. The intraday high of 92.75 was the strongest level since December 27.

The move higher came after a that showed fewer were created in April than expected, but the fell to 3.9%, its lowest level since December 2000.

Wage inflation remained subdued with a 2.6% rise year-on-year, missing expectations for a gain of 2.7%.

The increase in wages is being closely monitored by the Federal Reserve for evidence of diminishing slack in the labor market and upward pressure on inflation. Economists generally consider an increase of 3.0% or more to be consistent with rising inflation.

The data did little to alter market expectations for the Fed’s monetary policy path with the next hike still priced for June, with a follow-up in September. Odds for a fourth increase in 2018 at the end of the year remained at around 40% at the time of writing.

However, most experts believe that it is only a matter of time before the tightening labor market begins to push wages higher. The last time the jobless rate was at the current 17-year low annual wage inflation was climbing 4.3%.

“We still believe that the wage story will turn higher and be the catalyst for the Fed to take a more aggressive stance on the inflation threat,” ING economists remarked after the release.

“We continue to look for 3 further interest rates rises this year, starting with June 13,” they concluded.

Dollar strength was widespread after the report although most major rivals were pulling back from respective lows against the greenback.

was last down 0.43% to 1.3517, off an intraday low of 1.3487, its lowest since January 10. The move comes ahead of the Bank of England’s policy meeting next week. A string of weak data and comments from policymakers have dampened expectations that the central bank will move on interest rates.

Similarly, was last at 1.1929 after falling as far as 1.1911 earlier, its lowest level since December 28. Data released Friday in the euro zone showed weaker than expected retail sales and business activity, underlining the case for the European Central Bank’s caution in removing stimulus measures.

The euro was higher but came off the best levels of the day after data showing that slowed unexpectedly in April, underlining the case for the European Central Bank’s caution in removing stimulus measures.

The dollar showed less strength against the loonie on Friday, despite hitting a one-month high earlier. inched up 0.07% to 1.2862, paring gains from an intraday high of 1.2917, its highest level since April 3.

The notable exception among the pairs was , slipping 0.01% to 109.18.

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