Investing.com - The dollar edged higher against a basket of its major peers on Friday as remarks by a Federal Reserve official indicated that U.S. interest rates could still rise sooner than expected, despite a weaker than forecast employment report.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, ticked up 0.11% to 93.83 late Friday.
The index ended the week with gains of 0.89% after recovering from a trough of 91.91 hit on Tuesday, its lowest since January 2015.
New York Fed President William Dudley said Friday that it was reasonable to expect two rate hikes this year despite data showing that jobs growth increased at the slowest rate in seven months in April.
The Labor Department reported earlier Friday that the U.S. economy added 160,000 jobs last month, the smallest increase since September and well below the 202,000 jobs forecast by economists.
The unemployment rate remained steady at 5%.
The one bright sport of the report showed that average hourly earnings rose by eight cents or 0.3%, bringing the year-on-year increase to 2.5% from 2.3% in March.
The weak jobs data added to signs that the economy is losing momentum after the Commerce Department reported last week that U.S. economy grew at the slowest pace in two years in the first quarter.
The report saw investors all but abandon expectations for a June rate hike, with most investors now seeing the next U.S. rate hike coming in September.
The dollar was slightly lower against the yen late Friday, with USD/JPY at 107.11.
The dollar had risen against the yen in the previous three sessions as it recovered from an 18-month trough of 105.54 set on Tuesday.
The euro ended little changed against the dollar, with EUR/USD at 1.1404, well below the eight month highs of 1.1616 set on Tuesday.
Meanwhile, sterling fell to two-week lows, with GBP/USD down 0.39% to 1.4430, amid ongoing uncertainty over the June 23 referendum on the U.K.’s European Union membership.
The Canadian dollar fell to one-month lows after data showing that the economy unexpectedly shed 2,100 jobs last month and as a massive wildfire in Alberta clouded the outlook for the economy.
USD/CAD hit highs of 1.2952 before settling at 1.2908.
The Australian dollar was down 1.31% at 0.7367 late Friday after falling to two-month lows of 0.7337 earlier.
The Aussie ended the week down 3.24% after the country’s central bank cut interest rates for the first time in over a year in response to slumping commodity prices.
In the week ahead, investors will be looking to Friday’s U.S. data on retail sales, producer prices and consumer sentiment for fresh indications on the health of the world’s largest economy.
Market watchers will also be awaiting Monday’s minutes from the Bank of Japan’s April meeting after policymakers surprised markets by holding back from implementing fresh stimulus measures.
The Bank of England’s bumper data release on ‘Super Thursday’ will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, May 9
The Bank of Japan is to publish the minutes of its April policy meeting, giving investors insight into how officials view the economy and their policy options.
Germany is to publish data factory orders.
The U.K. is to produce an industry report on house price inflation.
Tuesday, May 10
China is to release data on consumer and producer price inflation.
New York Fed President William Dudley is to speak at an event in Zurich.
The U.K. is to report on the trade balance.
Wednesday, May 11
The Reserve Bank of New Zealand is to publish its financial stability report and Governor Graeme Wheeler is to hold a press conference.
The U.K. is to release data on industrial production.
Thursday, May 12
The Bank of England is to announce its latest interest rate decision and publish its monetary policy meeting minutes, including the voting breakdown. In addition, the bank is to release its quarterly inflation report and Governor Mark Carney, along with other policymakers, is to hold a press conference.
The U.S. is to publish the weekly report on initial jobless claims.
Friday, May 13
New Zealand is to publish figures on retail sales.
Germany is to release preliminary data on inflation.
The euro zone is to release a revised estimate of first quarter economic growth.
The U.S. is to round up the week with data on retail sales, producer prices and consumer sentiment.