Dollar weakens after dim outlook for interest rate

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TOKYO: The dollar faced selling pressure against major currencies in Asia on Monday after disappointing US jobs data cast a pall over the outlook for higher interest rates.

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The greenback fell to 119.05 yen in Tokyo afternoon trade from 119.62 yen on Friday, while the euro rose to $1.0977 and 130.70 yen from $1.0879 and 130.16 yen.

Global trading was thin, with many markets shut for public holidays.

The dollar’s drop came after the release Friday of closely watched US payrolls data, which showed employers sharply cut back on hiring in March.

The Labor Department on Friday said world’s leading economy generated 126,000 net new jobs in March, half of what was expected and the worst month since December 2013.

“Non-farm payrolls fell short of market expectations by a long way,” Toshiya Yamauchi, a senior analyst in Tokyo at Ueda Harlow Ltd., a margin-trading-services provider, wrote in a note to clients.

“Sentiment for dollar selling is set to continue,” he said.

The department also trimmed 69,000 from the two previous months’ figures, dimming the picture for growth after a year that averaged 287,000 new hires a month across the country.

“It’s pretty shocking,” said John Vail, the chief global strategist at Nikko Asset Management.

“This report obviously does push out expectations for a Fed hike to some degree, although we all know that the data can change very rapidly.”

The dollar was lower against other Asia-Pacific currencies.

It sank to Sg$1.3527 from Sg$1.3577 on Friday, to 1,083.91 South Korean won from 1,093.88 won to Tw$30.93 from Tw$31.06 and to 44.37 Philippine pesos from 44.45 pesos.

The dollar also declined to 12,949 Indonesian rupiah from 13,024 rupiah, to 32.44 Thai baht from 32.47 baht and to 62.15 Indian rupees from 62.50 rupees.

BLOOMBERG NEWS CONTRIBUTED TO THIS REPORT

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