NEW YORK (Reuters) - The dollar slipped against a basket of currencies on Friday as traders focused on the weaker aspects in the April U.S. payrolls report, brushing aside a stronger-than-forecast in hiring and a drop in the jobless rate to an over 49-year low.
FILE PHOTO: U.S. dollar notes are seen in front of a stock graph in this November 7, 2016 picture illustration. REUTERS/Dado Ruvic/Illustration
Traders turned their attention to the modest 0.2% monthly pace of wage growth and the drop in the job participation rate, which analysts blamed for the catalysts for some selling in the greenback.
“These soft details didn’t provide a compelling reason to add to already pretty big long dollar positions,” said Eric Viloria, currency strategist at Credit Agricole in New York.
At 11 a.m. (1500 GMT), an index that tracks the greenback against a basket of six currencies was 0.2% lower at 97.641, adding to its weekly decline of 0.3%.
The euro was up 0.17% at $1.11915, while the dollar was 0.25% weaker at 111.24 yen.
The single currency was on track to gain 0.3% versus the greenback, while the dollar was set to fall 0.2% against the yen.
Adding to the downward pressure on the dollar was a surprise drop in a measure of U.S. services activity from the Institute for Supply Management to a 20-month low in April.
Moreover, comments from two regional Federal Reserve chiefs supported bets the U.S. central bank might lower key lending rates by the end of the year even though Fed Chairman Jerome Powell said two days earlier he did not see the need to raise or cut rates right now.
Chicago Fed President Charles Evans said at an event in Stockholm that lower U.S. rates may be needed if the economy softens.
St. Louis Fed President James Bullard told CNBC television the Fed’s policy rate is “a little tight” and that current readings of inflation are uncomfortably low.
Interest rates futures implied traders saw about a 52% chance the Fed would lower rates at its Dec. 10-11 policy meeting, compared with 50% late on Thursday, according to the CME Group’s FedWatch program.
Among other major currencies, the Australian and New Zealand dollars have fallen on speculation both countries’ central banks will lower interest rates next week.
The Reserve Bank of Australia meets on May 7 and the Reserve Bank of New Zealand a day after. Each may cut rates after low inflation reports, analysts said.
The Aussie was up 0.29% at $0.702, while the Kiwi was 0.45% higher at $0.6647.
Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh
Additional reporting by Tom Finn in London, Wayne Cole in Sydney, editing by Larry King, Kirsten Donovan and Jonathan Oatis
https://www.reuters.com/article/global-forex/forex-dollar-dips-on-focus-on-soft-spots-in-u-s-jobs-report-idUSL5N22F4QC
2019-05-03 15:12:00Z
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