Dollar ends Q1 with steep losses, focus turns to US jobs data

The dollar remained under pressure early on Friday after ending the first quarter of the year with steep losses against many of its major counterparts. All eyes are now on the US nonfarm payrolls report due later on Friday. This an important employment report which the Fed also closely watches. The data is a good indication on the US labour market conditions and could give potential clues to the monetary policy outlook. The nonfarm payrolls report is expected to show that employers added 205,000 jobs in March.

The dollar index, which tracks the US currency against a basket of six major currencies, slipped to 94.565 early Friday, after losing more than 4 percent in the first quarter for its worst performance since the third quarter of 2010.

Much of the dollar’s weakness stems from a dovish speech by Fed Chair Janet Yellen last Tuesday. Yellen highlighted risks to the global economy and said the Fed should proceed “cautiously” on raising interest rates. Her comments dimmed hopes of those who expected a rate hike sooner rather than later.

The dollar fell about 0.2 percent against the yen, to 112.38 yen, after losing more than 6 percent in the first quarter, its biggest loss since the third quarter of 2009, as market turmoil sent investors into the perceived safety of the Japanese currency. The euro edged up about 0.1 percent to $1.1386 after gaining more than 4 percent for the quarter and hitting a more than 5-month high of $1.4120 on Thursday.

Economic data released early on Friday showed the Bank of Japan’s quarterly tankan survey of business confidence showed large manufacturers’ business sentiment deteriorated to its lowest level in nearly three years and was expected to worsen in the coming quarter.

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