The U.S. Department of Labor said the economy added 165,000 jobs in April, above expectations for an increase of 145,000, while job increases for the previous month were revised up to 138,000.
The U.S. unemployment rate unexpectedly fell to a four-month low of 7.5% from 7.6% in March.
The dollar jumped against the yen following the data, with USD/JPYhitting session highs of 99.27 before settling at 99.03, 1.10% higher for the day and up 1.16% on the week.
The dollar trimmed gains after a report by the Institute of Supply Management showed that the U.S. service sector expanded at the slowest pace in nine months in April.
The ISM non-manufacturing purchasing managers’ index fell to 53.1 from 54.4 in March, below expectations for a reading of 54.0.
A separate report showed that U.S. factory orders fell 4.0% in March, more than expectations for a 2.6% decline.
On Wednesday, the Federal Reserve recommitted to its USD85 billion a month asset purchase program and indicated that it could increase or decrease the monthly amount, depending on the outlook for inflation and employment.
The dollar was lower against the euro, with EUR/USD rising to highs of 1.3159, before settling at 1.3119, up 0.42% for the day and 0.19% higher for the week.
The euro remained under pressure after the European Central Bank cut interest rates to 0.5% from 0.75% on Thursday amid concerns over the deteriorating economic outlook for the euro zone.
Earlier in the week data showed that unemployment in the bloc rose to a record 12.1% in March, while inflation dropped to 1.2% in April.
The euro fell sharply on Thursday after ECB President Mario Draghi said the bank has an “open mind” on a negative deposit rate for banks. The deposit rate is the rate paid by the ECB on overnight deposits by euro zone banks.
The euro was sharply higher against the yen on Friday, with EUR/JPYjumping to session highs of 130.34, before settling at 129.93, 1.53% higher for the day and up 1.35% for the week.
In the week ahead, investors will be watching interest rate decisions by the Reserve Bank of Australia and the Bank of England. The euro zone is to release data on retail sales, while Germany is to publish official data on industrial output and factory orders. Elsewhere, China is to release closely watched government data on inflation.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, May 6
Markets in Japan are to remain closed for a national holiday.
Australia is to produce official data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
The euro zone is to produce official data on retail sales. Spain is to release government data on the change in the number of people unemployed, while Spain and Italy are to release data on service sector activity.
ECB President Mario Draghi is to speak at an even in Rome; his comments will be closely watched.
Markets in the U.K. are to be closed for the May Day holiday.
Canada is to release official data on building permits as well as a report on the Ivey PMI, a leading economic indicator.
Tuesday, May 7
The RBA is to announce its benchmark interest rate. The rate announcement is to be accompanied by the bank’s rate statement, which contains important insights into current and future economic conditions from the bank’s perspective.
Australia is also to publish official data on the trade balance and house price inflation.
New Zealand is to release data on labor costs, a leading indicator of consumer inflation.
The Swiss National Bank is to release data on foreign currency reserves, which gives a valuable insight into the scale of the bank’s currency market operations.
Switzerland is also to publish its SECO index of consumer climate and government data on the unemployment rate.
In the euro zone, Germany is to release official data on factory orders, while France is to produce data on industrial production.
Wednesday, May 8
The Reserve Bank of New Zealand is to publish its bi-annual financial stability report.
The U.K. is to release private sector data on retail sales, an important economic indicator.
Switzerland is to release official data on consumer price inflation, which accounts for the majority of overall inflation.
In the euro zone, Germany is to produce official data on industrial production, while markets in France are to remain closed for a national holiday.
Thursday, May 9
Both Australia and New Zealand are to release government data on the change in the number of people employed and the unemployment rate, a leading economic indicator.
China is to release official data on consumer price inflation, which accounts for the majority of overall inflation.
Markets in France, Germany and Switzerland are to remain closed for national holidays.
Meanwhile, the ECB is to publish its monthly bulletin, while Spain is to hold an auction of 10-year government bonds.
The U.K. is to release official data on manufacturing and industrial production, leading indicators of economic health. In addition, the BoE is to announce its benchmark interest rate.
Later Thursday, Canada is to release official data on new house price inflation.
The U.S. is to publish the weekly government report on initial jobless claims.
Friday, May 10
The RBA is to publish its monetary policy statement, which outlines the factors that influenced the bank’s rate decision.
Japan is to publish official data on the current account.
The U.K. is to release government data on the trade balance.
Canada is to release government data on the change in the number of people employed and the unemployment rate, a leading economic indicator.
The U.S. is to round up the week with data on the federal budget balance.
Also Friday, finance ministers and central bank heads from the Group of Seven nations are to hold the first day of a two day summit meeting.
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