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Dollar Little Changed Despite Weak Jobs Report

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The dollar is turning in a mixed performance against its major rivals Friday afternoon, but is little changed overall. The buck has pared its early losses, following the release of the disappointing August jobs report.

Job growth in the U.S. came in well below economist estimates in the month of August, according to a closely watched report released by the Labor Department on Friday.

The Labor Department said non-farm payroll employment climbed by 156,000 jobs in August compared to expectations for an increase of about 180,000 jobs.

The report also said the job growth in June and July was downwardly revised to 210,000 jobs and 189,000 jobs, respectively, reflecting a net downward revision of 41,000 jobs.

The unemployment rate subsequently inched up to 4.4 percent in August from 4.3 percent in July. Economists had expected the unemployment rate to remain unchanged.

Activity in the U.S. manufacturing sector expanded faster than estimated in the month of August, the Institute for Supply Management revealed in a report on Friday.

The ISM said its purchasing managers index climbed to 58.8 in August from 56.3 in July, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to inch up to 56.5.

Partly reflecting a steep drop in spending on public construction, the Commerce Department released a report on Friday showing an unexpected decrease in U.S. construction spending in the month of July. The report said construction spending fell by 0.6 percent to an annual rate of $1.212 trillion in July from the revised June estimate of $1.219 trillion. Economists had expected spending to rise by 0.5 percent.

Consumer sentiment in the U.S. improved by less than initially estimated in the month of August, according to a report released by the University of Michigan on Friday. The report said the consumer sentiment index for August was downwardly revised to 96.8 from the preliminary reading of 97.6. Economists had expected the index to be revised to 97.4.

The policy makers at the European Central Bank are unlikely to rush on a decision on next year's bond-purchase plan, which indicates the possibility of finalizing a decision until December.

Bloomberg reported that it is unlikely that the policy makers would settle the full details of the QE plan at the October 26 policy meeting and hence a final decision may be made only in December.

The final plan is expected to be delayed until December, when the current program is set to expire.

The dollar slipped to an early low of $1.1979 against the Euro Friday, but has since bounced back to around $1.1870.

The euro area manufacturing activity expanded at the fastest pace since 2011, as initially estimated, final survey data from IHS Markit showed Friday. The manufacturing Purchasing Managers' Index rose to 57.4 in August, in line with flash estimate, from 56.6 in July and equaling June's 74-month high.

The buck fell to a low of $1.2995 against the pound sterling Friday morning, but has since rebounded to around $1.2955.

The UK manufacturing sector expanded strongly in August driven by widespread growth across sectors, survey data from IHS Markit showed Friday.

The Markit/Chartered Institute of Procurement & Supply Purchasing Managers' Index rose unexpectedly to 56.9 in August from 55.3 in July. This was the second-highest level in over three years. The expected level was 55.0.

The greenback slid to an early low of Y109.529 against the Japanese Yen Friday, but has since risen to around Y110.230.

Capital spending in Japan advanced just 1.5 percent in the second quarter of 2017, the Ministry of Finance said on Friday. That missed forecasts for a gain of 7.9 percent following the 4.5 percent increase in the first quarter.

The manufacturing sector in Japan continued to expand in August, and at a faster rate, the latest survey from Nikkei revealed on Friday with a manufacturing PMI score of 52.2. That's up from 52.1, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

Japan's consumer sentiment weakened more-than-expected in August, survey data from the Cabinet Office showed Friday. The consumer confidence index fell to 43.3 in August from 43.8 in July. The expected reading was 43.5.

by RTT Staff Writer

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