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Sharp Slowdown In U.S. Job Growth Drags Dollar Down

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The U.S. dollar depreciated against its key counterparts in the European session on Friday, as the nation's employment increased much less than expected in April, backing hopes for a continuation of the accommodative policy by the Federal Reserve.

Data from the Labor Department showed that non-farm payroll employment rose by 266,000 jobs in April after surging by a downwardly revised 770,000 jobs in March.

Economists had expected employment to spike by 978,000 jobs compared to the jump of 916,000 jobs originally reported for the previous month.

The report also showed the unemployment rate inched up to 6.1 percent in April from 6.0 percent in March. Economists had expected the unemployment rate to drop to 5.8 percent.

U.S. treasury yields fell, with the benchmark yield on 10-year note touching 1.55 percent. Yields move inversely to bond prices.

Speaking to Bloomberg TV, Minneapolis Federal Reserve Bank President Neel Kashkari said that April's jobs report endorses the central bank's outcome-based approach to policy.

"I'm confident pricing pressures will be transitory," Kashkari added.

The greenback showed mixed performance against its major peers in the Asian session. While it rose against the yen, it was steady against the franc and the euro. Versus the pound, it fell.

The greenback lost 0.7 percent against the pound to touch an 8-day low of 1.3973. The pound-greenback pair had ended yesterday's trading session at 1.3882. Next immediate support for the greenback is seen around the 1.41 level.

Survey results from IHS Markit showed that UK construction sector logged a robust growth in April with continued recoveries seen in civil engineering activity, commercial work and house building.

The Chartered Institute of Procurement & Supply construction Purchasing Managers' Index came in at 61.6 in April, down only fractionally from March's six-and-a-half year peak of 61.7.

The greenback was 0.7 percent lower against the euro, at an 8-day low of 1.2146. The pair was worth 1.2065 when it closed deals on Thursday. The greenback is seen finding support around the 1.24 level.

Data from Destatis showed that Germany's exports growth accelerated unexpectedly in March.

Exports increased 1.2 percent on a monthly basis in March, while economists had forecast the growth to ease to 0.5 percent from 1 percent in February.

The greenback fell to its lowest level since February 23 against the franc, at 0.9021. At yesterday's trading close, the pair was quoted at 0.9070. Immediate support for the greenback is likely located around the 0.88 level.

Data from the State Secretariat for Economic Affairs showed that Switzerland's jobless rate decreased in April.

The jobless rate fell a seasonally to 3.1 percent in April from 3.3 percent in March. Economists had expected a rate of 3.3 percent.

The greenback touched a 10-day low of 108.34 against the yen, falling 0.9 percent from a high of 109.29 it set at 8:00 am ET. The pair had closed Thursday's deals at 109.08. Next likely support for the greenback is seen around the 106 level.

The latest survey from Jibun Bank showed that Japan's services sector continued to contract in April, albeit at a slower pace, with a services PMI score of 49.5.

That's up from 48.3 in March, although it remains slightly below the boom-or-bust line of 50 that separates expansion from contraction.

The greenback was down versus the loonie, at 1.2149. This followed a high of 1.2193 recorded at 8:30 am ET. The greenback was trading at 1.2147 against the loonie at yesterday's close. Should the greenback slides further, 1.19 is possibly seen as its next support level.

The dollar slid to an 8-day low of 0.7276 versus the kiwi, while touching 0.7835 against the aussie, its weakest level since March 18. The greenback was worth 0.7229 per kiwi and 0.7782 a aussie at Thursday's New York session close. Extension of downward trading may see the greenback finding support around 0.74 versus the kiwi and 0.80 against the aussie.

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