Early trade in New York: Dollar falls to lowest level in three weeks, euro rises

The dollar fell to the lowest level in three weeks on Friday after the US jobs report came in far below expectations and cast doubt on whether the Federal Reserve would raise US interest rates soon. The dollar index, which measures the greenback against a basket of major currencies, fell as much as 1.5 percent after the release of the data, on track for its largest one-day percentage loss in four months.
Nonfarm payrolls increased by only 38,000 jobs last month, the smallest gain since September 2010, the Labour Department said on Friday, with the goods producing sector shedding 36,000 positions. "It's a fairly disastrous payroll report," said Gennadiy Goldberg, interest rate strategist at TD Securities in New York. "This puts the nail in the June coffin, June's definitely off the table.
The Fed will definitely want to see a cleaner read on payrolls before taking rates higher again. This will weigh on July odds, and odds across the curve ... It's weak across the board, and very messy." Fed funds futures rates showed traders see only a 4 percent chance that the central bank will raise interest rates at its June 14-15 policy meeting, down from a 21 percent chance on Thursday, according to CME Group's FedWatch tool.
The dollar index was last down 1.4 percent to 94.249, after previously falling as low as 94.107, its lowest since May 13. The fall puts the index on track for the biggest one-day percentage drop since February 3. Against the yen, the dollar fell 1.5 percent to 107.21, having touched a low of 107.05 after the jobs report, the lowest since May 9. The euro was last up 1.4 percent against the dollar to $1.1308. It hit a high of 1.1333, the highest level since May 17.