Dollar steadies

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NEW YORK- The dollar strengthened but was still set for a weekly loss after data showed US employers hired far more workers than expected in March, potentially delaying anticipated interest rate cuts from the Federal Reserve this year.

Nonfarm payrolls increased by 303,000 jobs last month, the Labor Department said in its closely watched employment report on Friday. Economists polled by Reuters had forecast 200,000 jobs, with estimates ranging from 150,000 to 250,000.

The dollar index was last up 0.048 percent at 104.27, after rising to 104.690 It has had a turbulent week, falling from a five-month high to a two-week low after an unexpected slowdown in US services growth supported expectations of Fed rate cuts.

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US interest rate futures pared back the odds of a rate cut in June to 54.5 percent after the release of the jobs report, according to CME Group’s FedWatch tool.

“It’s really encouraging the market to get more and more comfortable with this fact that we know rates have to come down, but do they really need to come down quickly? And do they need to come down as much?” said Amo Sahota, director at Klarity FX in San Francisco.

Investors have reeled in expectations of how much the Fed might cut rates this year, with US rate futures now pricing in two cuts in 2024.

“That should continue to underpin dollar strength on a broad basis,” said Brad Bechtel, global head of FX at Jeffries.

But economic strength and higher prices of commodities, including oil, copper, coffee and cocoa, is complicating the inflation picture.

The dollar rebounded after comments on Thursday from Minneapolis Fed President Neel Kashkari, a non-voter on this year’s policy-setting committee, that rate cuts might not be required this year if inflation continues to stall.

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