The US dollar slipped against a basket of currencies on Friday as traders focused on the weaker aspects in the US payrolls report for last month, brushing aside a stronger-than-forecast in hiring and a drop in the jobless rate to a more than 49-year low.
Traders turned their attention to the modest 0.2 percent monthly pace of wage growth and the drop in the job participation rate, which analysts blamed for the catalysts for some selling in the greenback.
“These soft details didn’t provide a compelling reason to add to already pretty big long-dollar positions,” said Eric Viloria, currency strategist at Credit Agricole SA in New York.
An index that tracks the greenback against a basket of six currencies fell 0.4 percent to 97.48, bringing its weekly decline to 0.5 percent.
The euro rose about 0.17 percent to US$1.118, while the US dollar was about 0.25 percent weaker at 111.21 yen.
For the week, the single currency rose 0.4 percent versus the greenback, while the US dollar lost 0.4 percent against the yen.
In Taipei, the New Taiwan dollar on Friday fell against the US dollar, losing NT$0.002 to close at NT$30.907, unchanged for the week.
Adding to the downward pressure on the US dollar was a surprise drop in a measure of US services activity from the Institute for Supply Management to a 20-month low last month.
Moreover, comments from two regional US Federal Reserve chiefs supported bets that the US central bank might lower key lending rates by the end of the year, even though Fed Chairman Jerome Powell said two days earlier that he did not see the need to raise or cut rates right now.
Chicago Fed President Charles Evans said at an event in Stockholm that lower US rates might be needed if the economy softens.
St Louis Fed President James Bullard told CNBC television that the Fed’s policy rate is “a little tight” and that current readings of inflation are uncomfortably low.
Interest-rate futures implied that traders saw about a 52 percent chance the Fed would lower rates at its Dec. 10-11 policy meeting, compared with 50 percent late on Thursday, according to the CME Group’s FedWatch program.
Among other major currencies, the Australian and New Zealand dollars have fallen on speculation that both countries’ central banks will lower interest rates next week.
The Reserve Bank of Australia meets on Tuesday and the Reserve Bank of New Zealand a day after.
Each might cut rates after low inflation reports, analysts said.
Additional reporting by CNA
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