Dollar Falls After U.S. Economy Adds Fewer Jobs Than Forecast
May 5 (Bloomberg) -- The dollar fell against the euro and yen after a government report showed the U.S. economy added fewer jobs than forecast last month.
Investors may reduce wagers the Federal Reserve will raise interest rates one more time after an increase next week. The dollar has fallen about 2 percent versus the euro since Fed Chairman Ben S. Bernanke said on April 27 that the central bank may stop raising rates ``at some point,'' after 15 straight increases since June 2004.
``My guess is if you have a number that's in line or slightly weak you're going to see the dollar sell off even further,'' Greg Anderson, a currency strategist with ABN Amro NV in Chicago, said before the report.
The dollar traded at $1.2751 per euro at 8:33 a.m. in New York, compared with $1.2691 per euro late yesterday and $1.2634 per euro a week ago. Europe's common currency yesterday reached $1.2724, the strongest since May 12, 2005. The dollar was at 113.38 yen from 113.65.
The 138,000 gain in payrolls for April followed a revised 200,000 increase the month before and was the smallest increase since October, the Labor Department reported today in Washington. Average wages were up 3.8 percent from April 2005, the biggest gain since August 2001.
The slowdown in hiring suggests record gasoline prices and rising borrowing costs are forcing companies to rein in costs to maintain profits. Hourly earnings increased as factories, which tend to pay higher wages than service providers such as retailers, added the most jobs in almost two years. |
