The dollar experienced whipsaw trade in the wake of a monthly jobs report that largely met market expectations but fanned a little more worry about the economy's first quarter performance. Nonfarm payrolls rose 223,000 in April and unemployment fell to a 7-year low of 5.4 percent. Wage growth was light, up a mere 0.1 percent compared to forecasts of 0.2 percent.
The constructive April report offers concrete evidence of the economy emerging from its winter doldrums. It keeps the Fed on course to boost interest rates in coming months which is dollar positive. The data though boded a little worse for first quarter growth as job growth in March got downgraded to 85,000 from an already weak 126,000.
Today's jobs report can help put a floor under the dollar but for it to resume its rally, markets want to be more confident that the economy will strengthen this year which would give the Fed the green light to raise interest rates.
