The greenback rose broadly against major currencies after the release better-than-expected U.S. non-farm payrolls data which showed U.S. employers eliminated 20,000 jobs in April, less the expectation of 80,000 jobs losses, following a revised decline of 81,000 in March. The unemployment rate decreased to 5.0% in April from 5.1% in March. The factory orders in March rose by 1.4% (forecast was 0.2% rise) from a decrease of 0.9% in February.
The dollar was also supported by news about the injection of additional liquidity by major central banks to stabilize credit markets. The Fed said it would step up the amounts offered in some cash auctions to financial institutions, while the European Central Bank and Swiss National Bank will boost their auctions of dollar funds by European banks.
The single currency tumbled to five-week low of 1.5360 on Friday before paring some losses on profit-taking ahead of the weekend. U.S. dollar rallied versus the Japanese yen and Swiss franc from 104.33 to 105.70 and from 1.0465 to 1.0610 respectively. The British pound fell from 1.9898 to 1.9705. Euro weakened against the sterling from 0.7838 to 0.7766 before rebounding and closed at 0.7822.
Treasuries fell on Friday after the release of the payroll report, pushing the two-year note's yield to 2.54%, the highest level since January. Interest-rate futures showed an 86% chance that policy makers will keep the fed funds target unchanged at 2% when they next meet June 25, compared with 80% on Thursday.
Next week will see the release of U.S. ISM non-manufacturing on Monday; German, eurozone and U.K. services PMI respectively, eurozone PPI on Tuesday; U.K. Nationwide consumer confidence, industrial and manufacturing production, eurozone retails sales, German factory orders, U.S. productivity and pending home sales on Wednesday; German trade balance and industrial production, U.S. jobless claims and wholesale inventories on Thursday; Japan’s leading indicators and U.S. trade balance on Friday.