Investing.com – The dollar traded higher against a basket of major currencies as bullish services sector data offset an October jobs report that undershot expectations.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.23% to 94.84.
ISM nonmanufacturing data for October showed an uptick to 60.1, beating expectations of 58.5. This represents the highest reading for the service sector index since 2005.
The upbeat nonmanufacturing report raised investor outlook on the U.S. economy, spurring a rebound on the dollar, which had come under pressure following data showing the U.S. economy created fewer jobs than expected in October.
The U.S. economy added 261,000 jobs in October, the Department of Labor said Friday, that missed economists estimates for 310,000 new jobs.
The jobless rate remained steady at 4.2% while average hourly earnings was sluggish with growth roughly flat for the month.
Nonfarm payrolls data was a “perfectly decent report”, RBC Capital Markets' Chief U.S. Economist, Tom Porcelli said, as hurricane-related disasters have weighed on the labor market over the past two months.
The rebound in the dollar weighed on the euro, as the single currency reversed Thursday’s gains.
EUR/USD fell 0.47% to $1.1603, while EUR/GBP fell 0.56% to £0.8877.
GBP/USD rose 0.10% to $1.3073. Sentiment on sterling remained negative amid expectations that the Bank of England would be reluctant to raise rates anytime soon following its decision to raise rate for the first time in a decade on Thursday.
USD/JPY rose 0.22% to Y114.32, while USD/CAD fell 0.29% to C$1.2772 as Canadian labor market data topped expectations.