Investing.com - The dollar fell against a basket of other major currencies on Friday after weak wage growth in the latest U.S. jobs report saw investors push back expectations for a rate hike by the Federal Reserve.
The Labor Department reported that the U.S. economy added 252,000 jobs in December more than the 240,000 forecast by economists. The unemployment rate ticked down to a six-and-a-half year low 5.6% from 5.8% in November. Economists had forecast a decline to 5.7%.
But the report showed that average earnings fell by 0.2% in December, missing expectations for a 0.2% increase and were up by only 1.7% from a year earlier.
The drop in average earnings prompted investors to take profits in the dollar, as markets pushed back expectations for the first hike in U.S. interest rates to late-2015 from mid-2015 before the report.
Following an initial drop the euro gained ground against the dollar, with EUR/USD up 0.42% to 1.1841 in late trade, recovering from Thursday’s nine-year trough of 1.1753. The pair still ended the week down 0.88%, its fourth straight weekly decline.
In the euro zone, data on Friday showing that industrial output fell in both Germany and France in November, while German exports also fell, fuelling speculation that the European Central Bank will embark on full blown quantitative easing as soon as its next meeting on January 22.
USD/JPY was down 0.99% to 118.46 late Friday, and ended the week down 1.6%.
The dollar was also ended lower against the pound and the Swiss franc, with GBP/USD advancing 0.46% to 1.5152 and USD/CHF sliding 0.40% to 1.0142.
Elsewhere, the Canadian dollar fell to five-and-a-half year lows against the greenback after a report showed that Canada’s economy shed 4,300 jobs last month after losing 10,700 in November. Economists had forecast jobs growth of 15,000. The unemployment rate remained steady at 6.6%.
USD/CAD hit highs of 1.1890, the most since May 2009, before pulling back to 1.1864 at the close.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.39% to 92.18 late Friday, off the 12-year peaks of 92.76 reached in the previous session. The index still notched up a weekly gain supported by weakness in the euro.
In the week ahead, markets will be looking ahead to Wednesday’s report on U.S. retail sales, as well as Friday’s reports on consumer sentiment and factory output. The euro zone is to release revised data on consumer inflation and China is to release what will be closely watched trade data.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, January 12
Australia is to release data on home loans.
The Bank of Canada is to publish its quarterly business outlook survey.
In the U.S., Atlanta Federal Reserve President Dennis Lockhart is to speak.
Tuesday, January 13
Japan is to produce data on the current account.
China is to publish a report on the trade balance.
The U.K. is to release data on the consumer price index.
Wednesday, January 14
The euro zone is to publish data on industrial production.
The U.S. is to produce data on retail sales, in addition to reports on import prices and business inventories.
Thursday, January 15
Australia is to release data on the change in the number of people employed and the unemployment rate.
The U.S. is to publish the weekly report on initial jobless claims as well as data on producer prices and manufacturing activity in the Philadelphia region.
Friday, January 16
Japan is to release data on tertiary industry activity.
Switzerland is to publish data on retail sales.
The euro zone is to produce final data on consumer price inflation.
The U.S. is to round up the week with a report on industrial production and preliminary data on consumer sentiment.