World Economy

Dollar in Doldrums

Dollar in DoldrumsDollar in Doldrums

The dollar slipped on Friday after recording its worst quarter in 6 1/2 years, with investors doubtful that a monthly US jobs report will convince them to move up expectations for when interest rates will rise again.

The greenback shed over 4% against a basket of major currencies in the first quarter, as turbulent global markets and an increasingly cautious tone from the Fed pushed back expectations for when US rates might rise again, after the first increase in almost a decade in December, Reuters reported.

The dollar index was down 0.1% on Friday at 94.60, having hit a 5 1/2-month low of 94.32 on Thursday.

Earlier in the week, Fed Chair Janet Yellen highlighted risks to the global economy and said the Fed should proceed "cautiously" on raising rates. After her speech, interest rates futures implied that traders saw only a 5% chance the Fed would raise rates at its next policy meeting, on April 26-27.

"The most important number for the US dollar is the average earnings ... but even if we see a better number, this will create hope but it will not convince the market that everything is OK," said Commerzbank currency strategist Esther Reichelt, in Frankfurt. "I don't expect substantial dollar appreciation, but rather for it to remain cautious."

Against the yen, the dollar slipped about 0.4% on Friday to 112.17. It slid more than 6% against the yen in the first quarter, its biggest loss since 2009, as market turmoil sent investors into the perceived safety of the Japanese currency.

That trend continued on Friday, after a downbeat business survey helped send Japan's Nikkei stock index plunging on the first day of the country's fiscal year.