Forex - Dollar drops on disappointing U.S. August jobs report

Written By Unknown on Sabtu, 07 September 2013 | 08.10

Investing.com - The dollar softened against most major currencies on Friday after a disappointing U.S. August jobs report doused expectations for the Federal Reserve to begin tapering stimulus programs this month.

Stimulus programs such as the Fed's USD85 million in monthly asset purchases weaken the dollar to spur recovery, and talk of their staying in place — often the product of disappointing U.S. data — can soften the greenback.

In U.S. trading on Friday, EUR/USD was up 0.45% at 1.3179.

The U.S. economy added 169,000 jobs in August, according to the Bureau of Labor Statistics, less than market calls for a 180,000 increase.

July 's figure was revised down to 104,000 from 162,000, while June's figure was revised down to 172,000 from 188,000.

The private sector added 152,000 jobs in August, well beneath expectations for a rise of 180,000.

The U.S. unemployment rate fell to 7.3% in August from 7.4% in July, as more people left the workforce.

Analysts were expecting the unemployment rate to remain unchanged last month, and the jobs report sent the dollar falling by dampening expectations for the Federal Reserve announce at its Sept. 17-18 policy meeting a decision to begin winding down asset purchases.

Soft German data capped the euro's gains.

Germany reported that industrial production in Europe's largest economy contracted by 1.7% in July, well beyond expectations for a 0.5% fall after a downwardly revised 2% increase in June.

A separate report revealed that Germany's trade surplus narrowed unexpectedly to EUR14.5 billion in July from an upwardly revised June surplus of EUR15.8 billion. Analysts were expecting the trade surplus to expand to EUR16.1 billion in July.

The greenback was down against the pound, with GBP/USD up 0.27% at 1.5632.

Official data released earlier revealed that U.K. manufacturing production rose 0.2% in July, missing expectations for a 0.3% rise after an upwardly revised 2% increase the previous month.

A separate report showed that the U.K. trade deficit widened to GBP9.85 billion in July, from a downwardly revised GBP8.17 billion deficit the previous month. Analysts had expected the trade deficit to narrow to GBP8.15 billion in July.

U.K. industrial production came in flat in July, missing expectations for a 0.1% gain, though soft

The dollar was down against the yen, with USD/JPY down 0.98% at 99.12, and down against the Swiss franc, with USD/CHF trading down 0.75% at 0.9380.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.97% at 1.0403, AUD/USD up 0.69% at 0.9185 and NZD/USD trading up 1.48% at 0.8001.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.60% at 82.18.

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