NEW YORK / Content Syndication Services / – The U.S. dollar moved lower on Friday after June employment data showed slower job growth in the United States. The dollar index, which tracks the currency against six major peers, traded near 100.70 in Asia. It fell about 0.2 percent on the day after dropping 0.5 percent on Thursday. The index stood about 0.6 percent lower for the week, its largest weekly decline since early April.
The Bureau of Labor Statistics said nonfarm payrolls rose by 57,000 in June. The unemployment rate stood at 4.2 percent. The agency revised April and May job gains lower by a combined 74,000. The labor force participation rate fell to 61.5 percent. The report showed job gains in professional and business services, social assistance and health care. Leisure and hospitality employment declined by 61,000.
Currency markets adjusted after the payrolls report. CME FedWatch showed markets pricing a 52 percent chance of a Federal Reserve rate increase in September, down from 64 percent in the previous session. U.S. Treasury yields also eased. The two-year Treasury yield, which often reflects rate expectations, fell by 4 basis points after three straight sessions of gains. The Federal Reserve remains central to dollar trading.
Payrolls data shifts dollar trading
The euro traded near $1.1454, placing it close to a two-week high. It was up 0.6 percent for the week. Sterling strengthened to $1.3371 and headed for a 1.2 percent weekly gain. That marked its best weekly performance in nearly three months. The moves reflected broad weakness in the U.S. dollar after the jobs data.
The Japanese yen traded near 161.03 per dollar after moving away from a 40-year low. Japan’s Ministry of Finance kept attention on currency markets after recent yen weakness. Finance Minister Satsuki Katayama said Japan stayed in regular contact with Washington on foreign exchange issues. Traders also watched holiday-thinned U.S. markets, with American markets closed for Independence Day.
Major currencies gain ground
Other major currencies also rose against the dollar. The Australian dollar gained 0.3 percent to $0.6941 and moved toward ending a four-week losing streak. The New Zealand dollar traded at $0.5717 and stood 1.4 percent higher for the week. Asian currencies broadly firmed as the dollar weakened. The Indian rupee also drew support from the softer U.S. currency.
The payrolls report added a new data point to global currency trading after a strong run for the dollar in June. Average hourly earnings rose 0.3 percent to $37.64 in June. They increased 3.5 percent from a year earlier. The average workweek held at 34.3 hours. Investors continued to track labor data, Treasury yields and Federal Reserve expectations as key drivers for the dollar.