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    The greenback plunged to three-week lows

    The U.S. dollar fell to three-week lows against its other major counterparts on Friday, after the release of a disappointing U.S. jobs report for May that crashed expectations of a June rate hike by the Fed.
     
    The U.S. dollar that tracks the greenback’s performance against a basket of six other peers dropped 1.74% at 93.9 late Friday, registering the weakest level since the 12th of May. The index finished the week losing 1.54%.
     
    A report from the U.S. Labor Department released earlier on Friday, indicated that the economy added only 38,000 jobs in May, marking the smallest increase since September 2010. Analysts had expected that nonfarm payrolls would increase to 164,000.
     
    April’s print was downwardly revised to 123,000 from an initial estimate of 160,000. The unemployment rate dropped to 4.7% from 5% in April, as more people dropped out of the labour force.

    The weaker-than-expected report cast doubts over the possibility of an interest rate hike by the Federal Reserve in the near-term and triggered new concerns over slowing global growth.

    The U.S. dollar strengthened against the other major currencies last month, after the Federal Reserve Chair Janet Yellen and other policymakers reported that the U.S. economy gained enough traction to underpin higher interest rates. Higher rates will boost the greenback, as they will make it more appealing to yield-seeking investors.
     
    The dollar plummeted more than 2% against the Japanese yen, with USD/JPY losing 2.15% at 106.53 late Friday. The pair registered a weekly loss of 3.84%.
     
    The single currency edged higher, with EUR/USD soaring 1.91% to 1.1366, posting the largest one-day gain since the 3rd of December 2015.
     
    The sterling also inched up, with GBP/USD gaining 0.73% to 1.4528, but gains remained limited amid uncertainty over the upcoming British referendum on Britain’s E.U. membership.

    Today, market watchers will be closely monitoring Fed Chair Janet Yellen’s speech at an event in Philadelphia for new signals on the timing of future rate hikes. In addition, investors will be looking at Germany’s data on factory orders.
     

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