The dollar fell to seven-month lows on Friday after data showed the US economy created fewer jobs than expected last month, which could derail a possible interest rate hike by the Federal Reserve in the second half of this year. The greenback fell to seven-month troughs against euro and Swiss franc, while sliding from a one-week high versus the yen.
Data showed that US nonfarm payrolls increased just 138,000 last month as the manufacturing, government and retail sectors lost jobs, while the consensus forecast was for 185,000 new jobs. March and April data was revised to show 66,000 fewer jobs created than previously reported. May's job gains marked a sharp deceleration from the 181,000 monthly average over the past 12 months.
The unemployment rate, however, fell to a 16-year low of 4.3 percent. Despite the big miss in payrolls, analysts said this would not necessarily derail the Federal Reserve from raising interest rates this month. "A hike in June is still on the table but the news flow will have to improve for the Fed to keep tightening in the second part of the year," said Thomas Julien, US economist, at Natixis North America in New York.
In early New York trading, the dollar index fell to a seven-month low and was last down 0.3 percent at 96.873 The euro was 0.5 percent higher against the dollar to $1.1265, after earlier rising to a seven-month peak of $1.1282. Against the yen, the dollar fell from one-week highs and last changed hands at 110.74 yen, down 0.5 percent. The dollar also slid to seven-month troughs versus the Swiss franc, trading last at 0.9664 franc, down 0.5 percent.
Comments
Comments are closed.