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Dollar flat to slightly lower in wake of soft details in U.S. jobs report

imageEconomy36 minutes ago (Jul 02, 2021 11:16AM ET)

(C) Reuters. FILE PHOTO: A U.S. five dollar note is seen in this illustration photo June 1, 2017. REUTERS/Thomas White/Illustration/File Photo

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) -The dollar was little changed to slightly lower, sliding from a three-month high earlier on Friday, weighed down by some of the weaker details of what was an overall strong U.S. nonfarm payrolls report for June.

Volume is expected to thin out later in the session ahead of the July Fourth holiday weekend.

Despite a soft dollar on Friday, it was still poised to end the week on a positive note, with an 0.8% gain. Going into the report, the dollar traded higher on the expectation of a robust jobs number.

Data showed that U.S. nonfarm payrolls did beat expectations, increasing by 850,000 jobs last month after rising 583,000 in May. But the unemployment rate rose to 5.9% from 5.8% in May, while the closely watched average hourly earnings, a gauge of wage inflation, rose 0.3% last month, lower than the consensus forecast for a 0.4% increase.

“We initially reacted positively to the headline, which was stronger than expected,” said Vassili Serebriakov, FX strategist, at UBS in New York. “And then moved a little lower because of some of the weaker details of the report, such as the higher unemployment rate and the higher bar for a positive surprise.”

In late morning trading, the dollar index was slightly lower at 92.517, after earlier hitting a three-month high of 92.759.

The dollar trimmed losses after data showed U.S. factory orders surged 1.7% in May after slipping 0.1% in April. Economists polled by Reuters had forecast factory orders rebounding 1.6%. Orders increased 17.2% on a year-on-year basis.

The euro was down 0.2% on the day at $1.1832.

Against the yen, the dollar slid 0.2% to 111.305 yen. On Thursday, the greenback hit a 15-month peak versus the Japanese currency.

Despite the fall, TD Securities, said in a research note that the dollar is not looking at the start of a significant correction.

“Beyond the initial ‘sell the fact’ reaction that appears to be underway, 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.

The greenback has strengthened broadly since the U.S. Federal Reserve surprised markets last month by signaling it could tighten policy earlier than expected to curb inflation.

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Currency bid prices at 10:56AM (1456 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index 92.4980 92.5690 -0.06% 2.797% +92.7590 +92.3710

Euro/Dollar $1.1835 $1.1851 -0.13% -3.13% +$1.1859 +$1.1807

Dollar/Yen 111.3050 111.5750 -0.21% +7.76% +111.6550 +111.1500

Euro/Yen 131.72 132.15 -0.33% +3.78% +132.2200 +131.6900

Dollar/Swiss 0.9242 0.9257 -0.13% +4.49% +0.9274 +0.9224

Sterling/Dollar $1.3779 $1.3764 +0.11% +0.86% +$1.3790 +$1.3734

Dollar/Canadian 1.2372 1.2437 -0.52% -2.84% +1.2449 +1.2359

Aussie/Dollar $0.7488 $0.7471 +0.23% -2.66% +$0.7497 +$0.7445

Euro/Swiss 1.0937 1.0965 -0.26% +1.20% +1.0972 +1.0937

Euro/Sterling 0.8589 0.8603 -0.16% -3.89% +0.8617 +0.8589

NZ $0.6994 $0.6969 +0.37% -2.59% +$0.7004 +$0.6947

Dollar/Dollar

Dollar/Norway 8.6325 8.6315 +0.08% +0.60% +8.6735 +8.6255

Euro/Norway 10.2178 10.2179 +0.00% -2.38% +10.2598 +10.2150

Dollar/Sweden 8.5725 8.5722 -0.07% +4.59% +8.6014 +8.5577

Euro/Sweden 10.1471 10.1547 -0.07% +0.70% +10.1740 +10.1429

Dollar flat to slightly lower in wake of soft details in U.S. jobs report