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Dollar Declines As Fed Tightening Prospects Recede After U.S. Jobs Data

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The U.S. dollar fell against its major counterparts in the European session on Friday, as an unexpected rise in the nation's jobless rate for June reduced hopes for an early monetary policy tightening by the Federal Reserve.

Data from the Labor Department showed that non-farm payroll employment spiked by 850,000 jobs in June after surging by an upwardly revised 583,000 jobs in May.

Economists had expected employment to jump by about 700,000 jobs compared to the addition of 559,000 jobs originally reported for the previous month.

Meanwhile, the unemployment rate unexpectedly inched up to 5.9 percent in June from 5.8 percent in May. The unexpectedly rate was expected to edge down to 5.7 percent.

In an interview with The Wall Street Journal, Federal Reserve Bank of Philadelphia President Patrick Harker said on Thursday that he favors slowing down the pace of its asset purchase program later this year.

Harker added that the tapering process is likely to start sooner rather than later.

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

The greenback dropped to 111.15 against the yen, after touching 111.66 in the Asian session, which was its strongest level since March 2020. The pair was worth 111.51 when it ended deals on Thursday. Should the greenback slides further, 110 is possibly seen as its next support level.

The greenback slipped to a 2-day low of 0.9223 against the franc, from nearly a 3-month high of 0.9275 seen at 3:45 am ET. At Thursday's close, the pair was valued at 0.9253. The greenback is likely to find support around the 0.90 area.

The greenback edged down to 1.1859 against the euro, after having risen to nearly a 3-month high of 1.1807 at 8:30 am ET. The pair had closed Thursday's deals at 1.1848. Next likely support for the greenback is seen around the 1.20 level.

Data from Eurostat showed that Eurozone producer prices increased at a faster pace in May driven by a surge in energy cost.

Industrial producer prices were up 9.6 percent year-on-year, following a 7.6 percent rise in April. Economists had forecast an annual increase of 9.5 percent.

The greenback eased to 1.3791 against the pound, following a 2-1/2-month high of 1.3731 it reached at 8:30 am ET. The pound-greenback pair had finished yesterday's trading session at 1.3757. Immediate support for the greenback is likely located around the 1.41 level.

The greenback declined to 1.2364 against the loonie, after an 11-day rise to 1.2450 at 3:00 am ET. The greenback was trading at 1.2429 per loonie at yesterday's close. The greenback is seen facing support around the 1.21 level.

The greenback pulled back from its prior 11-day high of 0.6947 against the kiwi, with the pair worth 0.7005. At yesterday's trading close, the pair was quoted at 0.6964. The greenback may locate support around the 0.72 level.

Survey data from ANZ showed that New Zealand consumer confidence remained broadly unchanged in June.

The consumer sentiment index came in at 114.1 in July versus 114.0 in the previous month.

The greenback was down at 0.7498 versus the aussie, reversing from nearly a 7-month high of 0.7444 set at 8:30 am ET. The aussie-greenback pair was worth 0.7468 at Thursday's close. Further fall in the greenback may find support around the 0.77 mark.

Data from the Australian Bureau of Statistics showed that Australia's new housing loan commitments increased to a new high in May.

New housing loan commitments rose 4.9 percent in May to a new high of A$32.6 billion, driven by investor housing loan commitments.

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