The dollar fell globally on Friday to six-week lows after data showed that fewer jobs were created in the United States last month than expected, reinforcing expectations that the Federal Reserve, which chaired by Jerome Powell, will likely keep interest rates steady again at its December meeting.
The dollar index, which measures the performance of the currency against six other relevant currencies, fell 1.1% to 105.03 units, after touching 104.93 points, its lowest level since September 20. The index recorded its biggest one-day drop since July.
For the week, the dollar fell 1.4%, also its worst performance since July. Likewise, the euro rose 1.1% to $1.0735 and, thanks to the previous gains of the week, added a weekly advance of 1.6%, the largest in four months.
The data showed that nonfarm payrolls increased by 150,000 jobs last month. September figures were revised downward to show 297,000 jobs created, instead of 336,000 as previously reported. “The (employment) slowdown will likely keep the Federal Reserve on the sidelines going forward. One of their biggest concerns has been an overheated economy, especially after last quarter’s GDP expansion, and this suggests the problem is fading,” said Brad McMillan, chief investment officer at Commonwealth Financial Network in Waltham, Massachusetts.
“Slower growth is still growth, and this jobs report is still in the sweet spot. However, we see signs that there may be more weakness ahead,” she added.
The fall in the dollar reflects a decline in bond yields in the United States. The 10-year US Treasury yield fell to a five-week low of 4.484% and is headed for a decline of more than 30 basis points, the largest in a week since March 2020.