Disappointing U.S. Nonfarm Payroll Report Weighs on Dollar

Photo of author

By Brendel Balaga

The dollar slumped against major currencies on Friday, after new data revealed that the American economy generated fewer jobs than expected in May, making the odds of a near-term rate increase by the Federal Reserve less likely.

USD/JPY retreated 0.85% to trade lower at 107.93, a level not seen since May 9.

The Labor Department said 38,000 new jobs were added in May, significantly lower than expectations. Analysts were projecting for a rise of 164,000. Roughly 123,000 jobs were created in April, from a previously projected gain of 160,000.

Average hourly rate went up by 0.2% last month, in line with projections.

The disappointing report adversely affected the odds of a rate increase. The Federal Reserve earlier said that a hike in interest rates would be appropriate if the economy, particularly the labor market, continued to grow as expected.

EUR/USD rose 0.93% to trade higher at1.1255, a high last recorded May 18.

The greenback lost against the pound and the Swiss franc, with GBP/USD gaining 0.57% at 1.4505 and with USD/CHF retreating 0.74% to trade at 0.9831.

The Australian and New Zealand dollars edged higher against their U.S. rival, with AUD/USD tacking on 0.97% at 0.7299 and with NZD/USD rising 1.59% to 0.6922.

Elsewhere, USD/CAD fell 0.84% to trade at 1.2993, a one-week low.

The U.S. dollar index plunged 0.94% at 94.67, the weakest since May 18.

Images Courtesy of DepositPhotos