Jobs Growth Higher Than Expected

Jobs Forecast, GDP Boost Dollar
By RIVA FROYMOVICHApril 30, 2008 9:20 a.m.

The dollar extended earlier gains against the yen and euro Wednesday morning in New York after the release of first-quarter U.S. gross domestic product.
Gross domestic product rose at a seasonally adjusted 0.6% annual rate January through March, the Commerce Department said Wednesday in the first estimate of first-quarter GDP, matching economists' expectations.

The dollar consequently rose to a fresh four-week high. The euro fell to $1.5517. The dollar also gained to 104.89 yen. The buck has since fallen back some from those highs, but remains elevated against its rivals.
Wednesday in New York, the euro bought $1.5548 from $1.5565 late Tuesday, while the dollar traded at 104.62 yen from 103.98 yen. The euro was at 162.58 yen from 161.85 yen, according to EBS. The U.K. pound was at $1.9675 from $1.9684, and the dollar was at 1.0399 Swiss francs from 1.0379 francs.

Earlier in the morning, the dollar gained after the release of a private-sector payrolls report from payrolls giant Automatic Data Processing Inc. and consultancy Macroeconomic Advisers. They reported that private sector employment increased by 10,000 in April. Economists expected a decline of 70,000.
The ADP report is seen as an indicator, although not always a reliable one, for the all-important non-farm payrolls report from the Labor Department to be released this Friday.
"The ADP report was better than expected before the GDP. The full reaction to the ADP didn't come through. The market was waiting for the GDP," said Mitul Kotecha, head of global foreign exchange research for Calyon in London.
"I think that the GDP wasn't worse than expected helped the dollar, and the dollar is benefitting from both these factors, the ADP and GDP," he said.