Dollar Falls Third Week as Jobs Data Clouds U.S. Rate Outlook

The Fed is weighing data for signs the U.S. economy can weather higher borrowing costs as global growth stalls.
American companies added 126,000 jobs in March, almost half the 245,000 median estimate of 98 analysts surveyed by Bloomberg News. The increase was lower than the most pessimistic forecast and followed a 264,000 gain a month earlier that was smaller than initially reported, the Labor Department said.
“It’s pretty shocking,” said John Vail, the chief global strategist at Nikko Asset Management Co., which oversees $160 billion globally. “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 rate for fed funds futures for December fell four basis points to 0.34 percent, indicating about one-in-three odds of a rate increase by the Fed’s meeting that month.
Policy makers will still increase rates in August or September, according to Bill Gross, who runs the $1.5 billion Janus Global Unconstrained Bond Fund.
“They want to get off zero, if only to prove that they don’t have to stay at zero for a long, long time,” he said after the payrolls release.

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