* Dollar ends mostly flat after payrolls-related spike
* U.S. jobs gains of 288,000 smartly top forecasts
* Jobs gains offset by flat wages, other data shortfalls
(Adds dollar's fizzle, comments and latest prices)
By Michael Connor
NEW YORK, May 2 Currency traders briefly boosted
the dollar on Friday on news of surprisingly strong hiring that
took the U.S. unemployment rate in April to a 5-1/2-year low
before surrendering the gains on data signalling many Americans
were exiting the labor force.
The dollar index, a composite of six currency pairs,
was down 0.01 percent in late New York trade after rising about
0.40 percent on U.S. labor reports showing a big drop in the
The dollar rose sharply against the yen after the jobs data
to as high as 103.02 yen but dropped back to a nearly flat
102.23 yen late on Friday.
The euro was initially down 0.38 percent or more
against the dollar but was up a touch in late trading at
April's U.S. jobless rate was 6.3 percent, down 0.4 of a
percentage point, and the lowest since September 2008.
But the monthly jobs reports also showed a drop in the labor
participation rate, a reflection of increasing numbers of
Americans ending job hunting, and flat wage increases.
"Initially, it looked to people that the Federal Reserve
might speed up the normalization of interest rates but as they
looked at details (of the labor reports) they changed their
minds," said Joseph Trevisani, chief market strategist at
WorldWideMarkets Online in Woodcliff Lake, New Jersey.
The dollar will face headwinds in currency markets until the
Fed clearly adopts a program of raising rates, Trevisani said.
The U.S. government data, including a nonfarm payrolls surge
of 288,000 far above Wall Street forecasts of 210,000, bolstered
optimism about the U.S. economy for many.
"This keeps the Fed on track for tapering and for the first
interest rate hikes in 2015," said Anthony Valeri, investment
strategist at LPL Financial in San Diego.
(Editing by Nick Zieminski and James Dalgleish)