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US dollar drifts lower after key jobs data | |
(about 5 hours later) | |
The US dollar gave up earlier gains against the euro and Japan's yen on Friday, putting it on track to record a fourth consecutive week of losses, after an employment report showed a smaller than anticipated rise in wages in January. | |
The dollar index, which measures the buck’s strength against a basket of other currencies, was little changed on the day after the data was released, at around 99.85, according to Thomson Reuters data. | |
On Thursday it fell to 99.266, its lowest level since 13 November. | On Thursday it fell to 99.266, its lowest level since 13 November. |
Figures on Friday showed that job creation in the US surged in January, but the cooling in wage growth sends an ambiguous signal about the likelihood of more near term interest rate hikes from the Federal Reserve. | |
According to official data, total non-farm payrolls rose by 227,000 last month, much higher than the 175,000 expected by economists. | |
But the unemployment rate ticked up to 4.8 per cent, from 4.7 per cent previously. | |
Furthermore, average earnings grew by only 0.1 per cent in the month, down from the 0.2 per cent expansion in December and below analysts' expectations, suggesting still muted inflationary pressure. | |
Expectations of a rate hike generally tend to support the dollar and James Athey, a senior investment manager at Aberdeen Asset Management, said that "all of the numbers point towards it being more difficult to justify another hike in March". | |
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