The U.S. dollar drifted lower on Friday, as the economy created much fewer jobs than expected in September, casting uncertainty about the Federal Reserve’s rate hike this year.
Data from the Labor Department showed that the number of people employed rose by 142,000 in September following a downwardly revised increase of 136,000 jobs in August.
Economists had expected employment to climb by 203,000 jobs compared to the addition of 173,000 jobs originally reported for the previous month.
Meanwhile, the unemployment rate held at a seven-year low of 5.1 percent in September, matching economist estimates.
The weak job growth, coupled with slowing economic growth across the globe, made investors push back their expectations for a Fed hike this year.
The currency moved down on Thursday, as jobless claims more-than-expected in the week ended September 26th and ISM manufacturing index fell to a two-year low in September.
The currency that trended higher during the day turned negative immediately following the jobs data.
In early New York deals, the greenback hit more than a 3-week low of 118.95 against the Japanese yen, a 1.2 percent decline from its early 4-day high 120.41. The pair was valued at 119.91 when it closed Thursday’s trading. The next possible support for the greenback may be found around the 118.00 region.
Data from the Ministry of Internal Affairs and Communications showed that Japan’s unemployment rate in came in at a seasonally adjusted 3.4 percent in August.
That was above forecasts for 3.3 percent, which would have been unchanged from the July reading.
Extending early fall, the greenback hit a 4-day low of 1.5237 versus the pound, off its prior high of 1.5127. At yesterday’s close, the pair was quoted at 1.5130. Continuation of the greenback’s downtrend may take it to a support around the 1.53 mark.
British construction activity growth improved sharply in September as output grew at the fastest pace in seven months, led by residential building, prompting firms to add jobs the strongest pace in three months, survey results from Markit Economics and the Chartered Institute of Procurement & Supply showed.
The headline seasonally adjusted Marikt/CIPS UK Construction Purchasing Managers’ Index climbed to 59.9 from 57.3 in August. Economists had expected only a modest improvement with an increase to 57.5.
The greenback declined to 11-day lows of 1.1316 versus the euro and 0.9655 against the franc, reversing from its early high of 1.1150 and a 4-day high 0.9795, respectively. The greenback ended Thursday’s trading at 1.1193 against the euro and 0.9769 against the franc. If the greenback extends slide, 1.14 and 0.95 are seen as its next possible support levels against the euro and the franc, respectively.
The greenback declined to an 11-day low of 1.3185 against the loonie, while touching 0.6455 against the kiwi, its lowest since September 18. This may be compared to early highs of greenback to 1.3268 against the loonie and 0.6384 against the kiwi. The greenback is seen finding support around 1.30 against the loonie and 0.655 against the kiwi.
U.S. factory orders data for August is slated for release shortly.
At 1:30 pm ET, Federal Reserve Bank of Boston President Eric Rosengren will give welcome and opening remarks before the “Macro Prudential Monetary Policy” conference hosted by the Federal Reserve Bank of Boston. Additionally, Federal Reserve Governor Stanley Fischer is expected to speak at the conference.
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