* The US economy creates 236,000 new jobs. Dollar Rises * Some Sectors of the Economy Weaken in Terms of Jobs – DATA * US Interest Rate Futures Rate by 25 bps in May (Adds New Comments, Rates Update) By Gertrude Chavez-Dreyfus NEW YORK, Apr 7 (Reuters) – The Dollar strengthened on Friday after That data showed an increase in jobs in the world’s largest economy last month, suggesting that the Federal Reserve may have to raise interest rates next month. Ahead of the jobs report, the rate futures market was betting that the Fed would pause at the May policy meeting. The market has now priced in a 70% chance that the Fed will raise interest rates by 25 basis points, even though multiple rate cuts are already factored in by the end of the year. Friday’s data showed US nonfarm payrolls increased by 236,000 in March, in line with expectations of 239,000. February data was revised upward to show that 326,000 jobs were added instead of 311,000 as previously reported. The unemployment rate fell to 3.5% from 3.6% in February. Average hourly earnings, which reflect wage inflation, rose 0.3% in March after rising 0.2% in February. “Fed officials will likely continue to deliver their higher-for-the-longer message in the run-up to the May policy meeting, supporting expectations of a final rate hike and a floor for the dollar,” said Carl Chamota, chief market strategist. In Corby, Toronto. He added, “However, recent data suggests that the economic risk backdrop is turning more negative – if inflation numbers and retail sales disappoint in the coming weeks, all bets are off.” Liquidity weakened in the hours after the jobs numbers were released before the Easter break. Some European markets were also closed on Monday. In afternoon trading, the dollar index rose 0.1% to 102.03. Against the yen, the dollar rose 0.3% to 132.10 yen, while the euro fell 0.1% at $1.0910. The dollar rose 0.2% against the Swiss franc, to 0.9049 francs. The pound sterling similarly fell against the dollar, down 0.2% at $1.2412. Analysts also said that while the jobs report showed strong gains, there were sectors that saw moderate declines specifically the manufacturing and construction industries. “(This should be) an encouraging sign for the Fed, some of the effects of monetary policy are starting to take hold,” Charlie Ripley, chief investment analyst at Allianz Investment Management in Minneapolis, said in emailed comments. With the Nonfarm Payrolls out of the way, investors are now focusing on the US Consumer Price Index (CPI) for March. Economists polled by Reuters had forecast core CPI of 0.4% last month and 5.6% year-on-year. Tom Simmons, US economist at Jefferies, writes that he expects CPI to “continue to show uncomfortably high underlying inflation pressure.” ================================================== == ====== Currency Bid Quotes at 12:20 PM (1620 GMT) Description RIC Last US Pct Close YTD Change High Bid Low Bid Previous Session Bid Change Dollar Index 102.0200 101.9100 +0.14% -1.420 % +102.3000 +101.8700 euros / dollars $ 1.0910 $ 1.0921 -0.11 % + 1.82 % + $ 1.0922 + $ 1.0876 dollars / yen 132.1000 131.7700 + 0.28 % + 0.79 % +132.3650 +131.5200 euros / yen 144.17 143.88 + 0.20 % + 2.76 % +144.1900 + 143.6000 dollars / Swiss 0.9049 0.9045 + 0.10 % -2.08 % +0.9080 +0.9035 sterling / dollars 1.2412 $ 1.2438 -0.18 % + 2.67 % + $ 1.2455 + $ 1.2390 dollars / Canadi 1.3501 1.3493 + 0.18 % -24 % +1.3487 AUD / $0.6651 $0.6673 -0.12% -2.22% +0.6691 + $0.6641 EUR/CHF 0.9875 0.9879 -0.04% -0.20% +0.9890 +0.9862 EUR/GBP 0.8788 +0.87937% -0.8737% -0.8137% -0.8137% 0.8766 New Zealand dollars 0.6232 dollars 0.6245 + 0.04 % -1.61 % + 0.6270 dollars + 0.6210 dollars / dollar / dollar / Norway 10.4820 10.4410 + 0.37 % + 6.79 % +10.5140 +10.4540 euro / Norway 11.4485 11.3992 + 0.4 $11.4025 / Sweden 10.4578 10.4224 +0.16% + 0.48% +10.4762 +10.4219.16 Euro / Sweden 11.4067 11.3883 +% +2.31% +11.4216 +11.3787 (Reporting by Gertrude Chávez-Dreyfus; Additional reporting by Saqib Iqbal Ahmed. Editing by Mark Porter and Kirsten Donovan)