FOREX-Dollar gains after strong U.S. jobs, factory data

(Updates prices, adds comment; changes byline, dateline, pvs
LONDON)

* Nonfarm payrolls increased 215,000 last month

* U.S. March ISM manufacturing data beats expectations

* Euro falls to $1.1335 after touching $1.1437

By Sam Forgione

NEW YORK, April 1 The U.S. dollar rebounded on
Friday against a basket of currencies from Thursday’s more than
five-month lows after stronger-than-expected U.S. jobs and
factory data boosted expectations for a less dovish Federal
Reserve.

Nonfarm payrolls increased by 215,000 last month, the Labor
Department said, beating economists’ expectations for 205,000
according to a Reuters poll. Average hourly earnings increased 7
cents, while the unemployment rate rose to 5.0 percent from an
eight-year low of 4.9 percent.

The data came after the greenback’s worst quarterly
percentage loss in more than five years against a basket of
major currencies, partly on Fed Chair Janet Yellen’s dovish
comments Tuesday that the central bank should proceed
“cautiously” on raising rates.

“It’s certainly not the kind of data that argues for the Fed
to become even more dovish, and in that sense, it argues for the
dollar’s losses to slow,” said Shahab Jalinoos, global head of
FX strategy at Credit Suisse in New York.

The dollar’s gains accelerated after Institute for Supply
Management (ISM) data showing its index of national factory
activity rose to 51.8 from 49.5 the month before, above
expectations of 50.7 from a Reuters poll of economists.

“We do know that the threshold for Yellen to act is very
high, but as we get more pieces of the puzzle, the market is
taking note,” said Axel Merk, chief investment officer of Palo
Alto, California-based Merk Investments, on the strength in the
dollar after the U.S. jobs and manufacturing data.

The dollar index, which measures the greenback
against a basket of six major currencies, was last up 0.42
percent at 94.975 after hitting a session low of 94.334 before
the U.S. data. The index fell more than 4 percent in the first
quarter.

The euro, which hit its highest level in five and a
half months of $1.1437 before the U.S. jobs and manufacturing
data, turned negative against the greenback and hit a session
low of $1.1335 after the data.

The dollar was last down 0.18 percent against the yen
at 112.36 yen after touching a more than one-week low of 111.86
yen in volatile trading just after the U.S. jobs data.

The dollar hit a more than five-month low against the Swiss
franc of 0.9553 franc as the U.S. jobs data was released,
but erased its losses to last trade mostly flat against the
franc at 0.9613 franc.

(Reporting by Sam Forgione; Editing by Nick Zieminski)

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Source URL:http://www.reuters.com/article/global-forex-idUSL2N1740VJ

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