The US dollar slipped on Friday after earlier posting gains following a US jobs report that underperformed expectations, but was solid overall, as investors remained cautious about political risk in the country and trade negotiations with China.
The greenback hit session highs against the yen and euro following the jobs report, after trading lower for most of the session.
However, by afternoon trading, the US dollar’s rally faded.
The US dollar index slid 0.02 percent to 98.84, down 0.3 percent for the week.
The US dollar on Friday slipped against the yen to ￥106.82, down 1 percent for the week.
The euro gained 0.2 percent versus the dollar to US$1.0982, up 0.4 percent for the week.
In Taipei, the New Taiwan dollar yesterday ended unchanged to close at NT$30.973 against the greenback. The NT dollar was up 0.2 percent against the US dollar from last week’s NT$31.042.
Data showed that US non-farm payrolls increased by 136,000 jobs last month.
August data was revised to show 168,000 jobs created instead of the previously reported 130,000 positions.
Economists polled by Reuters had forecast payrolls would increase by 145,000 jobs last month.
The unemployment rate dropped to a near 50-year low of 3.5 percent.
“Given that market expectations have shifted after the ADP [private payrolls] and ISM [Institute for Supply Management], people were bracing for something worse than this. So this is in the ballpark of what is acceptable,” Scotiabank chief market strategist Shaun Osborne said in Toronto. “But there are other issues here for the dollar aside from the Fed easing, such as the US political backdrop. And we’re still looking at the funding tightness issue,” he added.
A drop in US unemployment pushed traders of US short-term interest rate futures on Friday to pare bets the US Federal Reserve will cut rates at both of its two upcoming meetings.
The jobs data were initially a big relief to US dollar bulls after two weak reports this week that heightened US recession fears.
On Thursday, a survey from the ISM showed its non-manufacturing activity index falling to 52.6 last month, the lowest since August 2016.
The non-manufacturing data came on the heels of the ISM’s manufacturing survey on Tuesday that showed activity plunging to more than 10-year lows.
However, the jobs report impact was short-lived as investors grappled with US political tensions.
Diplomatic texts released late on Thursday showed that US officials pressured their Ukrainian counterparts to launch investigations that could benefit US President Donald Trump’s personal political agenda in exchange for a meeting between the two countries’ leaders.
Additional reporting by CNA and staff writer
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