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Dollar Drifts Lower Against Major Currencies

Dollar Drifts Lower Against Major Currencies

The U.S. dollar lost ground against peers on Friday, weighed down data showing a smaller than expected increase in job additions in the U.S., and rising prospects of additional fiscal stimulus from Joe Biden administration.

Data released by the Labor Department showed a modest rebound in employment in the month of January. The report said non-farm payroll employment edged up by 49,000 jobs in January after plunging by a revised 227,000 jobs in December.

Economists had expected employment to rise by about 50,000 jobs following the loss of 140,000 jobs originally reported for the previous month.

The Labor Department also said the unemployment rate slid to 6.3% in January from 6.7% in December. The unemployment rate was expected to come in unchanged.

A report released by the Commerce Department on Friday showed the U.S. trade deficit narrowed in the month of December, as the value of exports jumped by more than the value of imports.

The Commerce Department said the trade deficit narrowed to $66.6 billion in December from a revised $69.0 billion in November.

Economists had expected the trade deficit to shrink to $65.7 billion from the $68.1 billion originally reported for the previous month.

The dollar index slid to 90.99, giving up nearly 0.6% from previous close.

The dollar weakened to $1.2047 against the Euro, losing about 0.7%.

Against Pound Sterling, the dollar was weaker at $1.3737, after closing at $1.3671 a day earlier. On Thursday, Bank of England cooled hopes for taking the bank rate into negative territory sooner and the progress in vaccine distribution spurred hopes for a gradual economic recovery.

Meanwhile, house prices fell 0.3% in January from a month earlier as the market appeared to lose momentum following a stimulus-fueled surge last year, according to mortgage lender Halifax.

The Yen was firmer at 105.40 a dollar, gaining from 105.55. Japan’s leading index declined in December after rising in the previous month, preliminary data from the Cabinet Office showed on Friday.

The leading index, which measures the future economic activity, fell to 94.9 in December from 96.1 in November. In October, the reading was 94.2.

The AUD-USD pair was last seen at 0.7674, down nearly 1% from previous close of 0.7600.

Against Swiss franc, the dollar was weaker, fetching CHF 0.8991 a unit, nearly 0.6% less than CHF 0.9042 on Thursday.

The Loonie firmed up to 1.2765 a dollar from 1.2827, riding on higher crude oil prices.

The material has been provided by InstaForex Company – www.instaforex.com