The dollar began to climb against its major European competitors ahead of the jobs report for April this morning, but sharply reversed direction after the report came in stronger than anticipated. The U.S. currency is now down against the Euro and the pound sterling, but is gaining ground against the Japanese Yen.
Employment in the U.S. increased by more than expected in the month of April, according to a report released by the Labor Department on Friday, with the job growth pushing the unemployment rate down to a new four-year low.
The Labor Department said non-farm payroll employment increased by 165,000 jobs in April compared to economist estimates for an increase of about 145,000 jobs. The report also showed notable upward revisions to the job growth in the two previous months, with employment rising by 138,000 jobs in March and 332,000 jobs in February.
With the stronger than expected job growth, the unemployment rate edged down to 7.5 percent in April from 7.6 percent in March. The unemployment rate had been expected to come in unchanged.
Activity in the U.S. service sector expanded at a slower than expected pace in the month of April, according to a report released by the Institute for Supply Management on Friday.
The ISM said its non-manufacturing index fell to 53.1 in April from 54.4 in March, although a reading above 50 indicates continued growth in the service sector. Economists had expected the index to edge down to 54.0.
With orders for durable goods showing a substantial pullback, the Commerce Department released a report on Friday showing that new orders for manufactured goods fell by more than expected in the month of March.
The report showed that orders for manufactured goods tumbled by 4.0 percent in March following a downwardly revised 1.9 percent increase in February. Economists had expected orders to fall by 2.8 percent compared to the 3.0 percent increase originally reported for the previous month.
The European Commission on Friday lowered the economic outlook for euro area for this year as well as the next, saying that the recovery of economic activity is expected to be too slow to reduce joblessness.
In its latest Spring 2013 Forecast, the commission said that the euro area economy will contract 0.4 percent in 2013, steeper than a 0.3 percent shrinkage predicted in February as the region heads into its second year of recession.
The 17-nation economy is expected to start recovering in 2014 with the gross domestic product seen increasing at a rate of 1.2 percent. This was also, however, weaker than a 1.4 percent growth projected in the Winter Forecast in February.
The dollar rose to a high of $1.3032 against the Euro before the jobs report Friday morning, but has since dropped to around $1.3110.
Producer price inflation in the euro area weakened for the third successive month in March, but was slightly above economists' forecast, latest data showed Friday.
The producer price inflation eased to 0.7 percent in March from a revised 1.4 percent in the previous month, marking the third slowdown in a row, statistical office Eurostat showed. Economists had forecast inflation to ease to 0.6 percent from the February's originally reported 1.3 percent.
The greenback climbed to a high of $1.5479 against the pound sterling before the jobs report, but has since fallen to around $1.5560.
The British service sector expanded at the fastest pace in eight months in April on strong growth in new order wins, adding to hopes that the modest growth seen in the first quarter would be sustained and recovery will pick up momentum in the coming months.
The seasonally adjusted headline business activity index for the service sector increased to 52.9 in April from 52.4 in March, indicating that economic activity increased at the fastest rate in eight months, a survey by Markit Economics and the Chartered Institute of Purchasing and Supply (CIPS) revealed. Economists had forecast the index to remain at the previous month's level.
The buck traded around the Y98.000 level against the Japanese Yen early Friday, but has since broken out to around Y99.100.
For comments and feedback contact: editorial@rttnews.com
Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.