The dollar dropped against the other major currencies on Friday, after data showed that the U.S. economy added far less jobs than expected last month, dampening hopes for a near-term rate hike by the Federal Reserve.
USD/JPY declined 0.85% to 107.93, the lowest since May 9.
The Labor Department said the U.S. economy added 38,000 jobs in May, far below expectations for an increase of 164,000. The economy created 123,000 jobs in April, whose figure was revised from a previously estimated gain of 160,000.
However, the report also showed that the U.S. unemployment rate fell to a more than eight-year low of 4.7% last month from 5.0% in April, compared to expectations for a downtick to 4.9%.
Average hourly earnings rose by 0.2% in May, in line with expectations.
The report dampened optimism over the strength of the U.S. job market et lowered expectations for a rate hike by the Fed this month.
Fed Chair Janet Yellen said late last week that it could be appropriate to raise rates in the coming months if the economy and the labor market continue to pick up as expected.
A separate report showed that the U.S. trade deficit widened to $37.40 billion in April from $35.50 billion in March, whose figure was revised from a previously estimated deficit of $40.40 billion. Analysts expected the trade deficit to widen to $41.30 billion in April.
EUR/USD advanced 0.93% to 1.1255, the highest since May 18.
The euro had showed little reaction after the European Central Bank left its benchmark interest rate unchanged on Thursday and warned that inflation in the euro area is likely to remain very low, or negative, for some time.
The dollar turned lower against the pound and the Swiss franc, with GBP/USD up 0.57% at 1.4505 and with USD/CHF sliding 0.74% to 0.9831.
Earlier Friday, research group Markit said its U.K. services purchasing managers’ index rose to 53.5 last month from a reading of 52.3 in April. Analysts had expected the index to rise to 52.5 in April.
The Australian and New Zealand dollars pushed higher, with AUD/USD up 0.97% at 0.7299 and with NZD/USD rallying 1.59% to 0.6922.
Elsewhere, USD/CAD retreated 0.84% to trade at a one-week low of 1.2993.
Statistics Canada reported on Friday that the trade deficit narrowed to C$2.94 billion in April from C$3.18 billion in March, whose figure was revised from a previously estimated deficit of C$3.41 billion.
Analysts had expected the trade deficit to narrow to C$2.45 billion in April.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.94% at 94.67, the lowest since May 18.