The US dollar on Friday dipped as a US Federal Reserve official said rate hikes are likely to slow and investors took profits from earlier gains after last month’s US jobs data and wage inflation were surprisingly robust, obscuring the outlook for how hawkish the US central bank would be.
The greenback initially jumped after data showed that employers added 263,000 jobs last month, well above estimates of 200,000.
“Stronger-than-expected hiring can buy the Fed more time to stay aggressive,” said Joe Manimbo, senior market analyst at Convera in Washington.
Investors zeroed in on an increase in average hourly earnings by 0.6 percent in the month, above expectations of a 0.3 percent gain, and the participation rate, which declined to 62.1 percent, said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.
“Both of those measures reflect more than the nonfarm payroll growth number the tightness of the labor market,” he said.
However, the US dollar gave back gains as investors took profits before the weekend and as Fed officials spoke on the outlook.
Chicago Fed President Charles Evans said that the pace of increases is likely to slow, but the US central bank would likely need to raise borrowing costs to a “slightly higher” peak than envisioned in forecasts from September.
Richmond Fed President Thomas Barkin said the US is likely in a sustained period in which there would continue to be a shortage of workers, complicating the Fed’s aim of getting labor demand back into balance.
The US dollar index on Friday closed down 0.21 percent against a basket of currencies at 104.51, declining 1.37 percent weekly.
The New Taiwan dollar rose against the US dollar on Friday, gaining NT$0.028 to close at NT$30.605, up 0.97 percent from NT$30.905 a week earlier.
The greenback slipped 0.76 percent against the Japanese yen to ￥134.31, while the euro gained 0.15 percent to US$1.0543.
Additional reporting by CNA, with staff writer
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