Dollar up after U.S. jobs data, euro edges lower

The dollar extended a rebound versus major peers on Friday after a key U.S. jobs report that could help the Federal Reserve decide whether to make an interest rate hike of up to 50 basis points next month

The euro edged lower, following its sharp retreat the previous day from a one-month high, as some hopes for a ceasefire in Ukraine faded

The U.S. currency has also benefited from safe-haven flows as peace talks between Russia and Ukraine stumbled, though they resumed on Friday

The Federal Open Market Committee (FOMC) will next decide policy on May 5, with CME Group’s FedWatch tool showing a 68.8% chance of a half-percentage-point rate increase. That would follow on from a quarter-point hike on March 16, when the Fed embarked on a new tightening cycle

Another FOMC meeting will follow on June 14-15

The U.S. economy added 431,000 jobs in March, slightly below economist expectations

Upside potential for the dollar index remains in scope “amid ongoing waves of fiercely hawkish Fedspeak and an aggressive frontloaded profile that includes almost 100 bps in hikes over the FOMC’s next two meetings,” Westpac strategists wrote in a client note

They predicted a break above 100 for the dollar index “in coming weeks

The euro was 0.2% lower at $1.1047

“The euro was dragged down by a correction in euro zone bond yields yesterday and less optimism around advancements in Russia-Ukraine peace negotiations,” said ING FX strategist Francesco Pesole

“Markets don’t seem to be particularly rewarding the euro for the lower oil prices,” he added

The dollar index, which gauges the greenback against six counterparts including the euro and yen, rose 0.2% to 98.55, building on Thursday’s 0.50% climb

Mid-week, it sank to a four-week trough of 97.681 amid a month-long consolidation that followed a breathless climb to a more than nine-month high at 99.415