The US dollar weakened further against a basket of major currencies on Friday after a much softer than expected US payrolls report, which is likely to keep the US Federal Reserve on hold in scaling back its massive stimulus measures.
Non-farm payrolls increased by 235,000 last month, well short of the 728,000 forecast by economists in a Reuters poll, while the unemployment rate dipped to 5.2 percent from 5.4 percent in the prior month.
The US dollar index dropped to a low of 91.941, its lowest level since Aug. 4, and was last down 0.12 percent at 92.12, down 0.6 percent for the week.
In Taipei, the New Taiwan dollar rose against the greenback, gaining NT$0.029 to close at NT $27.703, up 0.8 percent for the week.
The US dollar has been subdued on uncertainty over the path of Fed policy. Fed chair Jerome Powell said last Friday that while tapering of its stimulus could begin this year if job growth continues, the central bank was in no hurry to do so.
Rising COVID-19 cases in the past few weeks have brought on concerns the economic recovery could stall.
The jobs data would likely keep the Fed on hold.
“It’s the ultimate air cover, this is true air cover, they don’t have to do anything for a while,” said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago. “There is absolutely no reason for [Powell] to do anything with this except to say: ‘I told you so,’ and it certainly makes the September meeting a lot less climactic.”
The euro strengthened against the greenback following the report, touching a high of 1.1909 to match its best level since July 30.
The single currency has been supported by data earlier this week that showed regional inflation at a decade high and hawkish comments from European Central Bank officials ahead of a policy meeting on Friday.
The euro was last up 0.08 percent at US$1.1882. The Japanese yen strengthened 0.15 percent versus the greenback to ￥109.76 per US dollar, gaining ground after the jobs data, but showed little reaction to Japanese Prime Minister Yoshihide Suga’s decision to step down at the end of the month.
Sterling rose to a three-week high following the jobs report. The pound was up 0.03 percent against the US dollar at US$1.3838, having hit a high of US$1.3865 shortly after the jobs report was published.
That high was last seen on Aug. 16.
The pound had seen listless trading this week in the absence of major British economic data or policymaker speeches.
The speed of Britain’s COVID-19 vaccination program had contributed to the pound being the best performer among G10 currencies this year, but it has since lost that crown amid some potential clouds on the economic horizon.
Those included slowing credit card spending, fewer positive data surprises and rising COVID-19 cases among the elderly, analysts at Nomura said.
Additional reporting by CNA, with staff writer
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