The US dollar rally is on hold.
A gauge of the greenback dropped to a four-month low after US wages unexpectedly declined last month, outweighing higher-than-forecast jobs gains.
The mixed employment data will feed into the US Federal Reserve’s assessment of the economy when it meets later this month to decide on monetary policy.
“The dollar showed some strength, but that’s reversed course,” said Jennifer Vail, head of fixed-income research in Portland, Oregon, at US Bank Wealth Management, which oversees US$125 billion.
The report “has generated some concerns about whether or not wage growth is on a sustainable path,” she said.
The dollar index dropped 1.8 percent last month on concern that a global economic slowdown will drag down the world’s biggest economy. Last month’s stumble, which was the currency’s worst since April last year, followed a two-year rally on speculation that the Fed would boost borrowing costs while its biggest peers carried out unprecedented stimulus.
The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, dropped for a fifth day, falling 0.3 percent to 1,214.05 as of 5pm New York time. The index rose as much as 0.2 percent earlier.
The dollar slid 0.4 percent to US$1.1005 per euro, bringing its weekly decline to 0.7 percent.
The yen’s strongest gain since 2008 has petered out in time to forestall any intervention, according to Takatoshi Kato, a former top currency official at the Japanese Ministry of Finance.
The yen has outperformed all its major peers this year, and had its best month since the 2008 financial crisis last month.
At ¥113.4 per dollar on Friday in Tokyo, the currency remains well above Japan’s planning estimates, but Kato does not see that as running a significant risk to profits at the country’s exporters.
Hedge funds and other large speculators increased bets on dollar gains against eight major currencies for the first time in six weeks. The so-called net longs increased to 124,048 contracts in the week to March 1, according to the Commodity Futures Trading Commission in Washington.
Average hourly earnings dropped by 0.1 percent from the prior month, the first decline in more than a year, a US Department of Labor report showed on Friday.
Worker pay increased 2.2 percent over the 12 months ended last month, less than the 2.5 percent forecast in a Bloomberg survey.
Wage growth has been hovering just above 2 percent year-over-year on average since the current expansion began in mid-2009.
Employers added more workers last month than projected. The 242,000 gain followed a 172,000 rise in January that was larger than previously estimated. The jobless rate held at 4.9 percent, an eight-year low.
The US dollar fell against the New Taiwan dollar on Friday, shedding NT$0.078 to close at NT$33.101, from NT$33.496 on Friday last week, as further foreign inflows gave an additional boost to the local currency, dealers said.
The greenback opened at NT$32.96, and moved to a low of NT$32.8 before rebounding to the day’s high at the close. Turnover totaled US$1.366 billion.
A Bloomberg gauge of 20 developing-nation currencies rose 2.2 percent this week, the most since Oct. 9, as of 4:30pm in Hong Kong. The ruble has strengthened 4.2 percent and South Africa’s rand rallied 3.3 percent. The won advanced 2.9 percent, the ringgit gained 2 percent and the rupiah is up 1.9 percent. The Indian rupee advanced 2 percent, heading for its biggest weekly increase since May 2014.
The onshore yuan strengthened 0.31 percent this week in Shanghai.
The British pound dropped against the euro, paring its biggest weekly gain in four months, as waning concern about the risk of the UK leaving the EU coincided with signs of economic weakness.
The pound weakened 0.1 percent to £0.774 per euro, as of 4:44pm London time, leaving its weekly gain at 1.8 percent, the biggest since October last year. Sterling advanced 0.5 percent to US$1.4243, pushing its weekly advance to 2.7 percent weekly advance, the most since 2009.
Additional reporting by staff writer, with CNA
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