US dollar declines on data

Story link: US dollar declines on data

The US dollar weakened on Friday, dropping 0.5 percent to $1.3767 versus the euro, while it fell 0.2 percent to $2.0400 in relation to sterling.

The drops came on new jobs figures and declining activity in the services sector, as well as on increasing sentiment that the US Federal Reserve will not raise interest rates again this year and could even reduce them if enough data turned negative.

The US Labor Department reported that only 92,000 new jobs were created in the United States in July, substantially fewer than had been expected, and that the unemployment rate had jumped slightly to 4.6 percent.

Meanwhile, the Institute for Supply Management reported that its non-manufacturing index, which includes retailers and the financial sector, was down to 55.8 in July, from 60.7 in June.

Elsewhere, the greenback added 0.1 percent against the yen over the week even though the Japanese currency added 0.2 percent to ¥118.42 on Friday.

The dollar also dropped 1.2 percent over the week to the Swiss franc, to trade at SFr1.1938, its lowest level of the year so far.

The euro gained 1 percent to ¥163.01 versus the yen, aided by the growing expectation that the European Central Bank will raise interest rates from 4 percent to 4.25 percent in September.

Sterling also added 1 percent versus the yen this week to trade at ¥241.57 as analysts continue to believe that the Bank of England will also issue a rate hike in September, even though it held interest rates steady this week.