The US dollar fell on Friday, but trimmed losses against the euro and yen, after data showed the world’s largest economy added more new jobs than expected last month, reflecting a labor market that remained on stable footing.
Gains in the greenback came after rising for most of the week against both the euro and yen, as optimism grew about the prospect of tariff deals with many US trading partners including China.
The jobs report, meanwhile, reinforced expectations that the Federal Reserve will hold interest rates steady for the next few meetings and not cut them until probably the summer.
US data showed nonfarm payrolls increased by 177,000 jobs last month after rising by a downwardly revised 185,000 in March. Economists polled by Reuters had forecast 130,000 jobs added last month after a previously reported 228,000 gains in March.
The report, however, does not reflect the full impact of the tariffs imposed on the so-called Liberation Day on April 2. Economists expect jobs growth to slow in the coming months once the fallout from the punitive tariffs is taken into account.
“Today’s jobs report likely allows the Fed to take a more patient approach to rate cuts this year,” said Jason Pride, chief of investment research & strategy, at Glenmede in Philadelphia.
“Facing tariff-driven stagflation risks, the Fed is trying to gauge in real time whether the ‘stag’ or the ‘flation’ is the bigger risk to the outlook. The ongoing health of the labor market may reassure the Fed that the bottom is not falling out of the economy for the time being, which affords it some more time to assess the impact of tariffs on inflation.”
