May 4, 2018 / 1:24 PM / 19 days ago

FOREX-Dollar steady after jobs data disappoints

    * Dollar steady, after initial drop on jobs data
    * Index holds below 2018 high reached on Wednesday

 (Updates prices, market activity and comments to U.S. market
open, new byline, changes dateline, previous LONDON)
    By Karen Brettell
    NEW YORK, May 4 (Reuters) - The U.S. dollar was steady
against a basket of currencies on Friday, after briefly dropping
on disappointing U.S. employment data for April.
    The U.S. economy added fewer jobs than expected and the
unemployment rate dropped to near a 17-1/2-year low of 3.9
percent as some jobless Americans left the labor force. 
    Average hourly earnings rose 4 cents, or 0.1 percent, last
month after gaining 0.2 percent in March. That left the annual
increase in average hourly earnings at 2.6 percent.
    “The U.S. report seems pretty soft in tone on a headline
basis and in the details as well,” said Erik Nelson, a currency
strategist at Wells Fargo in New York. “It’s a little surprising
to see the dollar remain so resilient.”
    Against a basket of its peers, the dollar was up 0.13
percent on the day at 92.535, little changed from where it
traded before the data. It initially dropped to 92.354 on the
news.
    The dollar index reached a 2018 high of 92.834 on Wednesday
as investors bet that the Federal Reserve will continue raising
rates while other central banks including the European Central
Bank (ECB) will act more slowly.
    "The story in the last few days has been the disappointment
over the ECB and the UK to start raising interest rates in the
wake of the Fed and unless we see data picking up meaningfully,
the dollar will outperform in the coming weeks," said Gavin
Friend, senior markets strategist at NAB in London.
    The sharp rise in the dollar in recent weeks - it broke
above a 200-day moving average this week for the first time in a
year - took hedge funds and other investors by surprise. They
had built up record short bets on the dollar and were forced to
cover some of those positions, lifting the greenback even more.
    Wells Fargo’s Nelson sees further upside in the greenback as
likely limited, however, saying that pessimism over other
economies may be overdone.
    “Everyone’s gotten really pessimistic about the euro zone
economies and I think that’s maybe reaching a breaking point,”
Nelson said. “I think the economies are strong enough in those
countries to keep central banks on track to keep normalizing
monetary policy.”

========================================================
    Currency bid prices at 9:03AM (1303 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1952        $1.1987     -0.29%         -0.37%      +1.1995     +1.1954
 Dollar/Yen       JPY=        108.8300       109.1800    -0.32%         -3.40%      +109.2300   +108.6600
 Euro/Yen         EURJPY=     130.11         130.89      -0.60%         -3.75%      +130.9300   +130.0100
 Dollar/Swiss     CHF=        1.0003         0.9974      +0.29%         +2.67%      +1.0008     +0.9970
 Sterling/Dollar  GBP=        1.3555         1.3574      -0.14%         +0.30%      +1.3586     +1.3543
 Dollar/Canadian  CAD=        1.2870         1.2844      +0.20%         +2.33%      +1.2882     +1.2836
 Australian/Doll  AUD=        0.7526         0.7529      -0.04%         -3.53%      +0.7560     +0.7513
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1957         1.1960      -0.03%         +2.29%      +1.1974     +1.1938
 Euro/Sterling    EURGBP=     0.8817         0.8830      -0.15%         -0.74%      +0.8836     +0.8816
 NZ               NZD=        0.7016         0.7040      -0.34%         -0.99%      +0.7052     +0.7009
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.0644         8.0460      +0.23%         -1.74%      +8.0732     +8.0435
 Euro/Norway      EURNOK=     9.6403         9.6453      -0.05%         -2.12%      +9.6536     +9.6307
 Dollar/Sweden    SEK=        8.8358         8.8122      -0.02%         +7.73%      +8.8449     +8.7998
 Euro/Sweden      EURSEK=     10.5620        10.5640     -0.02%         +7.35%      +10.5769    +10.5469
 
 (Reporting by Karen Brettell; Additional reporting by Saikat
Chatterjee in London; Editing by Steve Orlofsky)
  
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