The US dollar was raises again versus a basket of currencies on Friday after briefly falling from disappointing US employment data for April. The US economy added fewer jobs than expected by 164,000 jobs, and unemployment fell to a 17-year low of 3.9% with declining participation rates in the sector.
Average hourly earnings rose by 0.1%, after rising by 0.2% previously, while wage rates raised 2.6% yoy. The dollar index, which measures the value of the currency against six major currencies, rose 0.13% to currently trade around 92.53.
Treasury yields dipped following the report. Despite the softer than expected wage reading, an unemployment rate drifting further below Federal Reserve officials’ estimates of levels sustainable in the long run may in their view add to upward pressure on wages and inflation. That would keep the central bank on track to raise interest rates in June for the second time this year and once or twice more after that in 2018.
President Trump’s flirtation with a trade war has thrust uncertainty into the overall economic picture. The White House has offered little clarity about whether its newly imposed steel and aluminum tariffs will extend to allies like Mexico, Canada and the European Union, and it seems no closer to smoothing over economic tensions with China.
