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Dollar Loses Ground Against Peers After Jobs Data

Dollar Loses Ground Against Peers After Jobs Data

The U.S. dollar drifted lower against other major currencies on Friday after data showing a smaller than expected increase in U.S. non-farm payroll jobs last month dented hopes of the Fed tightening its policy anytime sooner than expected.

Data from the Labor Department showed non-farm payroll employment jumped by 559,000 jobs in May after climbing by an upwardly revised 278,000 jobs in April. Economists had expected employment to surge by 650,000 jobs compared to the addition of 266,000 jobs originally reported for the previous month.

The Labor Department also said the unemployment rate fell to 5.8% in May from 6.1% in April, while economists had expected the unemployment rate to dip to 5.9%. With the bigger than expected decrease, the unemployment rate dropped to its lowest level since hitting 4.4% in March of 2020.

Traders seem to be viewing the weaker than expected job growth as a “Goldilocks” situation, where the economy is expanding but not fast enough to encourage the Federal Reserve to tighten monetary policy.

A report released by the Commerce Department showed new orders for U.S. manufactured goods pulled back by more than expected in the month of April, sliding by 0.6%, after surging by an upwardly revised 1.4% in March. Economists had expected factory orders to edge down by 0.2% compared to the 1.1% jump originally reported for the previous month.

The dollar index slipped to 90.03, and was last seen at 90.11, down more than 0.4% from the previous close.

Against the Euro, the dollar weakened to $1.2169, down 0.35% compared to Thursday’s close of $1.2127. Eurostat data showed that Eurozone retail sales dropped 3.1% in April on a sequential basis, compared with the 1% decline expected by economists.

The Pound Sterling strengthened against the dollar, fetching $1.4167 a unit, compared with $1.4106 on Thursday.

The Yen firmed up to 109.53, gaining from 110.31 a dollar.

The Aussie gained against the dollar, with the AUD-USD at 0.7743, gaining more than 1.1%.

The Swiss franc strengthened to CHF 0.8990 a dollar, gaining from CHF 0.9035 a dollar.

The Loonie strengthened to C$ 1.2081 a dollar, from C$ 1.2107, as oil prices surged higher. Data released by Statistics Canada showed the Canadian economy shed 68,000 jobs in the month of May 2021, much more than an expected decline of 20,000 jobs. The economy lost 207,000 jobs in April.

The unemployment rate in Canada increased to 8.2% in May, up from 8.1% a month earlier.

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