Dollar flat to slightly lower in wake of soft details in US jobs report
The U.S. dollar was perched at a 15-month high on the yen and at multi-month peaks against other majors on Friday, as traders wagered strong U.S. labour data could lift it even further.
NEW YORK: The dollar was little changed to slightly lower, sliding from a three-month high earlier on Friday, weighed down by some of the weaker details of what was an overall strong U.S. nonfarm payrolls report for June.
Volume is expected to thin out later in the session ahead of the July Fourth holiday weekend.
Despite a soft dollar on Friday, it was still poised to end the week on a positive note, with an 0.8per cent gain. Going into the report, the dollar traded higher on the expectation of a robust jobs number.
Data showed that U.S. nonfarm payrolls did beat expectations, increasing by 850,000 jobs last month after rising 583,000 in May. But the unemployment rate rose to 5.9per cent from 5.8per cent in May, while the closely watched average hourly earnings, a gauge of wage inflation, rose 0.3per cent last month, lower than the consensus forecast for a 0.4per cent increase.
"We initially reacted positively to the headline, which was stronger than expected," said Vassili Serebriakov, FX strategist, at UBS in New York. "And then moved a little lower because of some of the weaker details of the report, such as the higher unemployment rate and the higher bar for a positive surprise."
In late morning trading, the dollar index was slightly lower at 92.517, after earlier hitting a three-month high of 92.759.
The dollar trimmed losses after data showed U.S. factory orders surged 1.7per cent in May after slipping 0.1per cent in April. Economists polled by Reuters had forecast factory orders rebounding 1.6per cent. Orders increased 17.2per cent on a year-on-year basis.
The euro was down 0.2per cent on the day at US$1.1832.
Against the yen, the dollar slid 0.2per cent to 111.305 yen. On Thursday, the greenback hit a 15-month peak versus the Japanese currency.
Despite the fall, TD Securities, said in a research note that the dollar is not looking at the start of a significant correction.
"Beyond the initial 'sell the fact' reaction that appears to be underway, we think the overall tone of the report remains positive. After two consecutive 'disappointments', the June data offers reassurance that the US economic rebound is on track," the Canadian bank said.
The greenback has strengthened broadly since the U.S. Federal Reserve surprised markets last month by signaling it could tighten policy earlier than expected to curb inflation.
Currency bid prices at 10:56AM (1456 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Dollar index 92.4980 92.5690 -0.06per cent 2.797per cent +92.7590 +92.3710
Euro/Dollar US$1.1835 US$1.1851 -0.13per cent -3.13per cent +US$1.1859 +US$1.1807
Dollar/Yen 111.3050 111.5750 -0.21per cent +7.76per cent +111.6550 +111.1500
Euro/Yen 131.72 132.15 -0.33per cent +3.78per cent +132.2200 +131.6900
Dollar/Swiss 0.9242 0.9257 -0.13per cent +4.49per cent +0.9274 +0.9224
Sterling/Dollar US$1.3779 US$1.3764 +0.11per cent +0.86per cent +US$1.3790 +US$1.3734
Dollar/Canadian 1.2372 1.2437 -0.52per cent -2.84per cent +1.2449 +1.2359
Aussie/Dollar US$0.7488 US$0.7471 +0.23per cent -2.66per cent +US$0.7497 +US$0.7445
Euro/Swiss 1.0937 1.0965 -0.26per cent +1.20per cent +1.0972 +1.0937
Euro/Sterling 0.8589 0.8603 -0.16per cent -3.89per cent +0.8617 +0.8589
NZ US$0.6994 US$0.6969 +0.37per cent -2.59per cent +US$0.7004 +US$0.6947
Dollar/Norway 8.6325 8.6315 +0.08per cent +0.60per cent +8.6735 +8.6255
Euro/Norway 10.2178 10.2179 +0.00per cent -2.38per cent +10.2598 +10.2150
Dollar/Sweden 8.5725 8.5722 -0.07per cent +4.59per cent +8.6014 +8.5577
Euro/Sweden 10.1471 10.1547 -0.07per cent +0.70per cent +10.1740 +10.1429
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Emelia Sithole-Matarise, William Maclean and Jonathan Oatis)