Dollar falls broadly after US jobs report

Dollar falls broadly after US jobs report

The dollar tumbled against the euro and the yen on Friday after mixed signals about the U.S. labor market quashed expectations the Federal Reserve will start reducing its bond purchases as early as next month.

U.S. employers slowed their pace of hiring in July, with job growth of 162,000, the Labor Department said Friday. That was below the median forecast in a Reuters poll of 184,000. The jobless rate fell to 7.4 percent.

Expectations the Fed may start winding down its stimulus program as early as September have buoyed the dollar this year. Those hopes have faded a bit in recent weeks and the Fed on Wednesday offered no indication of a near-term move at the end of a two-day policy meeting.

“Any misconceptions that the Fed was looking to taper in September have been blown out of the water today after the nonfarm payrolls number disappoints to the nth degree,” said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York.

“The U.S. economy remains on a shaky foundation in terms of both GDP and employment. Until the foundation is strengthened, the Fed will be forced to continue its easing bias.”

The euro rose 0.4 percent to $ 1.3265, having hit a session peak of $ 1.3284, according to Reuters data.

The dollar lost 0.4 percent to 99.11 yen, having fallen as low as 98.91 yen.

The government also cut its previous estimates for hiring in May and June. While gains in employment fueled some of the decline in the jobless rate, the labor force also shrank during the month.

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