Investing.com - The dollar turned broadly lower on Friday after the latest U.S. employment report showed that the rate of jobs growth slowed in August, adding to uncertainty over whether the Federal Reserve will hike interest rates later this month.
The Labor Department reported that the U.S. economy added 173,000 jobs last month, slowing after an upwardly revised gain of 245,000 in July. It was the smallest increase in employment in five months and was below expectations for 220,000.
The unemployment rate ticked down to 5.1%, its lowest level since April 2008 from 5.3% in July, while average hourly wages rose by a stronger-than-expected 2.2%.
The jobs report failed to provide much clarity on when the U.S. central bank will decide to raise short term interest rates.
The dollar has come under pressure in recent weeks as slowing growth in China prompted investors to push back expectations for the timing of an initial rate hike by the Fed.
The yen rallied following the report, with USD/JPY down 0.88% to 119.01 in late trading. The pair ended the week down 1.88%.
The euro pushed higher, with EUR/USD last up 0.25% to 1.1150.
The single currency fell to two-week lows against the dollar on Thursday after the European Central Bank indicated that it could scale up its quantitative easing program and downgraded its forecasts for growth and inflation.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last at 96.26, almost unchanged for the day after fluctuating between small gains and losses.
The dollar was broadly higher against the commodity linked currencies, boosted in part by lower oil prices.
USD/CAD advanced 0.76% to 1.3278 late Friday.
In Canada, data on Friday showed that the economy added 12,000 jobs last month, compared to expectations for a decline of 4,500 jobs.
The unemployment rate rose to a one-year high of 7% as more people looked for work.
The data indicated that the Bank of Canada is likely to leave monetary policy on hold at its upcoming policy setting meeting.
The Australian dollar fell to six-and-a-half year lows, with AUD/USD falling 1.57% to 0.6907, while NZD/USD dropped 1.74% to 0.6287.
In the week ahead, investors will be looking ahead to Friday’s U.S. reports on producer prices and consumer sentiment for further indications on the strength of the economy.
Monetary policy meetings in Canada, New Zealand and the U.K. will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, September 7
The Swiss National Bank is to publish data on its foreign currency reserves. This data is closely scrutinized for indications of the size of the bank’s operations in currency markets.
Markets in the U.S. and Canada are to remain closed for the Labor Day holiday.
Tuesday, September 8
Japan is to release revised data on second quarter economic growth, as well as data on the current account.
Australia is to release private sector data on business confidence.
Wednesday, September 9
Australia is to produce data on home loans and consumer sentiment. The deputy governor of the Reserve Bank of Australia is to speak at an event in Melbourne.
The U.K. is to report on the trade balance and industrial production.
Canada is to publish figures on building permits.
Later Wednesday, the Bank of Canada is to announce its benchmark interest rate and publish its rate statement.
Thursday, September 10
The Reserve Bank of New Zealand is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision.
Japan is to publish data on machinery orders.
Australia is to release its latest employment report.
China is to release figures on consumer and producer price inflation.
The Bank of England is to announce its benchmark interest rate and publish its rate statement.
The U.S. is to release data on initial jobless claims.
Friday, September 11
Japan is to publish its BSI manufacturing index.
European Union finance ministers are to hold talks in Brussels.
The U.S. is to round up the week with data on producer prices and consumer sentiment.