The US dollar edged higher against a basket of major rivals on Friday after US jobs data was seen as decent enough to support the possibility of another interest rate increase from the US Federal Reserve this year.
Traders initially sold the US dollar in a knee-jerk reaction to US Department of Labor data showing non-farm payrolls increased by 156,000 last month, below expectations of economists polled by Reuters for a gain of 180,000.
A one-10th of a percentage point uptick in the unemployment rate to 4.4 percent and tepid wage growth also briefly sent the US dollar lower.
However, the greenback reversed its losses and pushed higher with the euro down 0.4 percent at US$1.1866 after briefly hitting a session high of US$1.1979. The common currency fell 0.5 percent against the greenback from last week’s US$1.1920.
In Taipei, the New Taiwan dollar rose against the greenback, gaining NT$0.047 to close at NT$30.156. The NT dollar rose 0.3 percent against the US dollar from last week’s NT$30.250.
The US dollar index, which measures the greenback against a basket of six major currencies, was 92.85 after initially plunging 0.5 percent. The index rose 0.1 percent from last week’s 92.74.
“If the markets are discounting a December [Fed rate hike] just on the back of this, it’s probably premature,” said Thierry Albert Wizman, global interest rates and currencies strategist at Macquarie Ltd in New York.
The US dollar also recovered since it was oversold heading into the employment report, said Alfonso Esparza, senior currency analyst at Oanda Corp in Toronto.
The US dollar index is coming off its sixth consecutive monthly decline, although last month’s drop of 0.2 percent was the smallest since the streak began in March.
Through last month, the index had declined 9.3 percent, the worst first eight months to a year since 1986.
“The [Fed] rate hike is still sort of a question mark, but [Friday’s jobs data] wasn’t that big a miss to take it totally off the table for the rest of the year,” Esparza said.
The US dollar was up 0.2 percent against the yen at ￥110.21 after slumping to a session low of ￥109.57 just after the US jobs data.
The dollar posted its biggest weekly gain against the yen since early July, of about 0.8 percent.
Additional reporting by CNA
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