Forexpros – The U.S. dollar fell against the yen and the euro in holiday thinned trade on Friday, as the release of disappointing nonfarm payrolls data revived expectations that the Federal Reserve could implement fresh monetary easing measures.
The Department of Labor said U.S. nonfarm payrolls rose by 120,000 in March, far lower than expectations for a 203,000 increase. The previous months figure was revised up to 240,000, from a previously reported 227,000.
The U.S. unemployment rate ticked down to 8.2%, the lowest since January 2009, from 8.3% in February.
The weaker-than-expected data revived expectations that the Federal Reserve may implement a third round of quantitative easing, which would weaken the dollar.
The dollar had strengthened broadly earlier in the week after the minutes of the Fed’s March meeting indicated that policymakers will refrain from launching a third round of easing unless the rate of economic growth falters or inflation drops below the central bank’s 2% targeted rate.
The greenback fell to a one-month low against the yen following Friday’s data, while the euro climbed from a three-week low against the dollar.
But the euro remained under pressure amid concerns over Spain’s high borrowing costs following a poorly received government debt auction earlier in the week, while worries over the economic outlook for the euro zone also weighed.
On Thursday, the euro briefly breached the 1.20 exchange rate floor against the Swiss franc for the first time since the Swiss National Bank capped the franc at that level in September 2011, amid concerns over the rapid appreciation of the Swiss currency.
Meanwhile, the pound was higher against the greenback on Friday, paring back some of the week’s losses after mixed U.K. economic data cast doubts over the strength of the country’s economic recovery.
The Bank of England kept its interest rate on hold at 0.5% on Thursday and left the size of its asset purchase program unchanged at GBP325 billion.
Elsewhere, the Australian dollar ended the week close to a three-month low against the greenback as uncertainty over the outlook for global growth weighed.
Earlier in the week, the Reserve Bank of Australia left interest rates on hold at 4.25%, but indicated that it may cut interest rates as soon as next month, amid concerns that the economy is growing at a slower than average rate.
In the week ahead, investors will be eyeing a speech by Fed Chairman Ben Bernanke on Tuesday for any indications on what the future direction of monetary policy may be.
Elsewhere, the Bank of Japan is to hold its monetary policy meeting on Tuesday, which will be closely watched following the bank’s surprise decision to ease policy in February.
In addition, market participants will be watching developments in the euro zone, amid ongoing concerns over the threat of contagion from Spain.
Ahead of the coming week, Forexpros has compiled a list of these and other significant events likely to affect the markets.
Monday, April 9
Markets in Australia, Switzerland, the euro zone and the U.K. will remain closed due to the Easter holiday.
Japan is to produce government data on the country’s current account, the difference in value between imported and exported goods, services, income flows, and unilateral transfers.
The euro zone is to produce official data on investor confidence, a leading indicator of economic health.
Later in the day, the Bank of Canada is to publish its Business Outlook Survey, a key gauge of economic health.
Tuesday, April 10
Australia is to publish industry data on job advertisements followed by a report on business confidence. Meanwhile, the BoJ is to release its monetary policy statement, which is to be followed by a press conference later in the day.
The U.K. is to release industry data on house price balance, an important signal of housing inflation.
In the euro zone, France is to release official data on industrial production, a leading indicator of economic health.
Elsewhere, Federal Reserve Chairman Ben Bernanke is due to speak at the Federal Reserve Bank of Atlanta Financial Markets Conference.
Wednesday, April 11
New Zealand is to release industry data on business confidence and house price inflation, while Australia is to publish a report by the Westpac Banking Corporation on consumer sentiment, a key indicator of consumer spending. The country is also to produce official data on home loans, a key gauge of demand in the housing market.
Meanwhile, Japan is to release government data on core machinery orders, a leading indicator of production. Later in the day, the BoJ is to publish its monthly report, which contains the statistical data that BOJ Policy Board members evaluated when making the latest interest rate decision.
Also Wednesday, the U.K. is to produce industry data on retail sales, an important indicator of economic health.
Elsewhere, Canada is to publish industry data on housing starts, an important signal of economic health.
In the U.S., government data is to be released on import prices as well as crude oil stockpiles and the federal budget balance. The Fed is also to publish its Beige Book.
Thursday, April 12
Australia is to release a report by the Melbourne Institute on inflation expectations, followed by official data on employment change and the unemployment rate, an important signal of economic health.
In the euro zone, the European Central Bank is to publish its monthly bulletin. A report on industrial production in the single currency bloc is also to be released later in the day.
Elsewhere in Europe, the U.K. is to produce official data on trade balance, the difference in value between imported and exported goods.
Later in the day, Canada is to release data on trade balance, followed by an official report on new housing price inflation, a key indicator of the housing industry’s health.
Also Thursday, the U.S. is to produce official data on the trade balance, as well as government data on producer price inflation and initial unemployment claims.
Friday, April 13
The BoJ is to release the minutes of its most recent policy meeting.
Later in the day, the U.K. is to publish official data on producer price inflation input, a leading indicator of consumer inflation.
The U.S. is to round up the week with official data on consumer price inflation and a preliminary report by the University of Michigan on consumer sentiment, a key gauge of consumer spending. Fed Chairman Bernanke is also due to speak later Friday.
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