The US dollar dropped from a three-month high earlier on Friday, weighed down by what analysts viewed as a mixed US nonfarm payrolls report for last month that showed a healthy headline number, but with some weak components.
The dollar index fell 0.375 points or 0.4 percent to 92.222, after earlier hitting a three-month high of 92.759.
Despite a soft US dollar on Friday, it ended the week on a positive note, with an 0.42 percent gain. Going into the report, the US dollar traded higher on the expectation of a robust jobs number.
Photo: Reuters
Data showed that US nonfarm payrolls did beat expectations, increasing by 850,000 jobs last month after rising by 583,000 in May.
However, the unemployment rate rose to 5.9 percent from 5.8 percent in May, while the closely watched average hourly earnings, a gauge of wage inflation, rose 0.3 percent last month, lower than the consensus forecast for a 0.4 percent increase.
Analysts said overall the report was strong and trended in the right direction, which should cement the case for the US Federal Reserve to start tapering its asset purchases soon. That should be positive for the US dollar.
The greenback has strengthened broadly since the Fed’s policy-settingFederal Open Market Committee (FOMC) surprised markets last month by signaling it could tighten policy earlier than expected to curb inflation.
“The bigger picture is that the greenback has extended its post-FOMC rally against the other major currencies this week,” Capital Economics senior markets economist Jonas Goltermann said. “We expect it to make further headway, provided that the US data continue to come in strong.”
The US dollar earlier trimmed losses after data showed US factory orders surged 1.7 percent in May after slipping 0.1 percent in April.
Economists polled by Reuters had forecast factory orders rebounding 1.6 percent.
Orders increased 17.2 percent on a year-on-year basis.
In Taiwan, the New Taiwan dollar declined against the greenback on Friday, dropping NT$0.086 to close at NT$27.990, down 0.3 percent from a week earlier. Turnover totaled US$1.235 billion during the trading session.
The euro was up 0.1 percent on the day at US$1.1851.
Against the yen, the dollar slid 0.5 percent to ￥111.04, after earlier hitting a 15-month peak.
Despite the fall, TD Securities said in a research note that the US dollar is not looking to be at the start of a significant correction.
“Beyond the initial ‘sell the fact’ reaction that appears to be under way, we think the overall tone of the report remains positive. After two consecutive ‘disappointments,’ the June data offers reassurance that the US economic rebound is on track,” the Canadian bank said.
Additional reporting by CNA, with staff writer
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