© Reuters. FILE PHOTO: Four thousand dollars is counted by a banker counting the currency at a bank in Westminster, Colorado on Nov. 3, 2009. REUTERS / Rick Wilking
By John McCrank
NEW YORK (Reuters) – The dollar fell to its lowest level in more than two months on Friday after US employment data for April fell well below expectations, dampening hopes that a roaring economic recovery sparked higher interest rates and a fire would ignite the greenback.
The number of non-farm workers rose only 266,000 last month after rising 770,000 in March, the Labor Department said in its closely watched employment report. Economists polled by Reuters had forecast an increase of 978,000 jobs.
"The number has been so inconsistent that I think market expectations of super high interest rates and inflation pressures will fall by the wayside, and that obviously means more liquidity from the Fed," said Boris Schlossberg, managing director of FX strategy at BK Asset management.
It also means US interest rates will remain at extremely low levels for quite a while, and that will keep pressure on the dollar, added Schlossberg.
The dollar fell 0.63% against a basket of major currencies to 90.297 after falling to 90.209 according to salary data, its lowest level since Feb.26.
The euro rose 0.75% against the greenback to $ 1.21555 and the pound sterling 0.73% to $ 1.3993.
"This is just a report, but it changes the way many traders think about how this rebound is headed," said Edward Moya, senior market analyst at FX broker OANDA in New York.
Elsewhere, China's exports accelerated unexpectedly in April and import growth hit a decade high, helping to push yuan and Asian stocks higher.
China's yuan rose to more than two-month highs against the dollar and was set for its longest weekly profit streak since September, aided by strong trading data and the weaker dollar.
The MSCI Emerging Market Currency Index hit a record high of 1741.34 on Friday, boosted by gains in and the weaker greenback.
Emerging market currencies also benefited from the commodity supercycle, said Simon Harvey, FX analyst at Monex Europe.
Commodity-linked currencies were higher, with the exception of the Canadian dollar, which was nearly flat at 1.21505 against the US dollar at 1.21505 following a worse-than-expected Canadian job report for April due to a third wave of COVID-19 lockdowns. On Thursday it rose to its strongest level in more than three years.
The Australian dollar rose 0.72% against the US dollar to 0.7841. This was supported by a sharp price hike for Australia's top export earner iron ore.
"We anticipate that AUD, CAD and NOK will continue to be well supported amid fairly positive optimism about global growth," wrote MUFG research director Derek Halpenny in a note referring to the Australian and Canadian dollars as well as the Norwegian krone .
In cryptocurrencies, ether rose 1.35% to $ 3,537.29 after hitting an all-time high on Thursday.
rose 2.98% to $ 58,128.86.
The meme-based virtual currency Dogecoin, which began as a satirical criticism of the 2013 cryptocurrency frenzy, rose 4.49% to $ 0.6107 before Elon Musk, Chief Executive Officer of Tesla (NASDAQ 🙂 Inc, on that one Performed live on Saturday evening at the weekend.
Musk's tweets about Dogecoin in the past helped send the digital currency, which has risen more than 14,000% this year alone, to heaven.
"According to the SNL, some crypto traders could give up short-term Dogecoin bets once it becomes clear they won't explode to the moon or the heavily-eyed $ 1 level," OANDA's Moya said.