* Nonfarm payrolls rose by 266,000 jobs vs forecast of
978,000
* Dollar down broadly
* MSCI EM currency index hits record high
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
(Adds reaction to U.S. jobs data, analysts' comments, updates
prices, changes dateline)
By John McCrank
NEW YORK, May 7 (Reuters) - The dollar fell to its lowest in
more than two months on Friday after U.S. jobs data for April
came in well below expectations, putting a damper on hopes that
a roaring economic recovery would lead to higher rates any time
soon.
Nonfarm payrolls increased by only 266,000 jobs last month
after rising by 770,000 in March, the Labor Department said in
its closely watched employment report on Friday. Economists
polled by Reuters had forecast payrolls advancing by 978,000
jobs.
The dollar was down 0.34% at 90.561 against a basket of
major currencies, having dropped as low as 90.338, its lowest
since Feb. 26, following the data.
"The dollar is really getting spanked this morning," said
Boris Schlossberg, managing director of FX strategy at BK Asset
Management.
"The number was so out of consensus, that I think the market
expectation of super-high rates and a squeeze on inflation is
going to go down by the wayside, and that obviously means more
liquidity from the Fed," he said.
It also means U.S. interest rates will stay at ultra-low
levels for quite a while and that is going to keep the pressure
on the dollar, Schlossberg added.
The euro was up 0.44% against the greenback at $1.21140
and the British pound was up 0.3% at $1.3933.
"This is only one report, but this is changing many traders'
thinking on how this recovery is unfolding," said Edward Moya,
senior market analyst at FX broker OANDA, in New York.
Elsewhere, China's exports unexpectedly accelerated in April
and import growth hit a decade high, helping to push the yuan
and Asian stocks higher.
China's yuan was at a more than two-month high versus the
dollar, set for its longest weekly winning streak since
September, helped by the strong trade data and softer dollar.
The MSCI emerging market currency index hit a record high of
1732.79 on Friday, lifted by gains in the Chinese yuan. Monex
Europe's Harvey said that emerging market currencies were also
benefiting from the "commodity supercycle".
The Canadian dollar was up 0.27% at 1.2185 to the U.S.
dollar, having surged on Thursday to its strongest in more than
three years.
The Australian dollar was up 0.19% versus the U.S. dollar,
at 0.77995, more than recouping losses from earlier in
the session.
The Aussie has been supported by a strong rally in the
prices of Australia's top export earner, iron ore.
"We expect the likes of AUD, CAD and NOK to remain well
supported with the backdrop for positive optimism over global
growth still quite favourable", MUFG head of research Derek
Halpenny wrote in a note.
In cryptocurrencies, ether rose 0.51% to $3,507.92, having
hit a all-time high on Thursday.
Bitcoin was up 1.4%, at $57,237.60.
(Reporting by John McCrank in New York; additional reporting by
Elizabeth Howcroft in London; Editing by Steve Orlofsky and
Emelia Sithole-Matarise)