Investing.com - The dollar dropped on Friday in the U.S. as fresh sanction by Washington on Iran led to safe-haven demand for the Japanese yen and gold.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.11% to 99.72. USD/JPY changed hands at 112.61, down 0.17% on safe-haven demand, while AUD/USD traded at 0.7684, up 0.35% and GBP/USD dipped 0.34% to 1.2481.
The U.S. Treasury Department sanctioned more than two dozen Iranian, Chinese, and Emirati businesses and persons for supporting Iran’s ballistic missile program and named officers and business executives tied to Iran’s elite military unit, the Islamic Revolutionary Guard Corps, for their suspected role in aiding the Lebanese militia, Hezbollah, and Tehran’s defense industries.
U.S. officials said the sanctions, the first issued against Iran in more than a year, didn’t violate the landmark nuclear agreement Tehran reached with the U.S. and other world powers in 2015. President Donald Trump issued a cryptic tweet after the sanctions.
"Iran is playing with fire - they don't appreciate how "kind" President Obama was to them. Not me!"
Overnight, the dollar turned lower against other major currencies on Friday, re-approaching a two-and-a-half month low after a string of U.S. data painted a mixed picture of the economy.
The Institute of Supply Management said its non-manufacturing purchasing managers’ index ticked down to 56.5 in January from 56.6 the previous month. Analysts had expected the index to rise to 57.0 last month.
A separate report showed that U.S. factory orders increased by 1.3% in December, beating expectations for a 1.0% rise.
The data came after the U.S. Department of Labor said the economy added 227,000 jobs in January, exceeding expectations for an increase of 175,000, The economy added 157,000 jobs in December, whose figure was revised from a previously estimated gain of 156,000.
However, the report also showed that the U.S. unemployment rate ticked up to 4.8% last month from 4.7% in December. Analysts had expected for an unchanged reading in January.
Data also showed that U.S. average hourly earnings rose 0.1% in January, disappointing expectations for an increase of 0.3%.
Sentiment on the greenback has been under pressure in recent weeks as U.S. President Donald Trump’s protectionist policies and immigration bans spur uncertainty in global markets.