Investing.com - The euro gained ground against the dollar on Friday after data showing that the U.S. economy added far fewer jobs than expected last month prompted investors to push back expectations for higher interest rates.
EUR/USD hit highs of 1.1027 and was last at 1.0970, up 0.83% for the day.
The drop in the dollar came after the report from the Labor Department showed that the U.S. economy added 126,000 new jobs in March, less than half of February’s gain and the smallest increase since December 2013. Economists had forecast jobs growth of 245,000 last month.
February’s figure was revised down to 264,000 from 295,000. The unemployment rate remained unchanged at a six-and-a-half year lows of 5.5%, in line with forecasts.
The surprisingly weak report added to concerns over the outlook for economic growth after other recent economic data pointed to a slowdown at the start of the year.
A slowing labor market could prompt the Federal Reserve to delay a planned increase in interest rates. Last month the Fed indicated that the first rate increase could come as soon as June, but added that continued improvement in labor markets would be a key factor it would consider.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies fell 0.95% to 96.84. The index ended the week down 0.74%, its third straight weekly decline.
The drop in the dollar was exacerbated by thin trading conditions due to the Easter holiday weekend. Most markets in Europe were closed and U.S markets traded for shortened hours.
In the week ahead, markets outside the U.S. will remain closed on Monday. The U.S. is to release what will be closely watched data on service sector activity on Monday and the Federal Reserve is to publish the minutes of its March meeting on Wednesday.
Also Wednesday, the euro zone is to release data on retail sales.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, April 6
European markets are to remain closed for holidays.
In the euro zone, Spain is to release its monthly unemployment report.
Later in the day, the Institute of Supply Management is to release data on U.S. service sector activity.
Tuesday, April 7
The euro zone is to release revised data on service sector activity.
Wednesday, April 8
The euro area is to publish data on retail sales, while Germany is to release data on factory orders.
Later Wednesday, the Fed is to publish the minutes of its March meeting.
Thursday, April 9
The U.S. is to release the weekly report on initial jobless claims.
Friday, April 10
The U.S. is to round up the week with a report on import prices.