WASHINGTON (dpa-AFX) - The U.S. dollar lost ground against major currencies on Friday as disappointing jobs data raised expectations that the Federal Reserve will cut interest rate sometime soon.
Worries about the ongoing U.S.-China trade spat on the economy had already prompted a few Federal Reserve officials, including Chairman Jerome Powell to hint at a likely reduction in interest rates to support the economy.
The dollar index dropped to a low of 96.46 around mid morning and stayed extremely range-bound since then. It was last seen hovering near 96.55, down by over 0.5% from previous close.
Against the euro, the dollar weakened to 1.1335, losing about 0.5%. The euro gained notable ground in positive territory after the ECB came up with a less dovish stance yesterday.
On Thursday, the European Central Bank left its key interest rate unchanged and said it expects interest rates to remain at the present level till the middle of 2020. Earlier, the bank expected rates to remain unchanged at least through the end of this year. Markets were hoping that the ECB would signal a rate cut.
In economic news from Europe today, Germany's industrial output declined more-than-expected in April, falling 1.9% on month, data from Destatis revealed.
Another report from Destatis said Germany's exports fell a seasonally adjusted 3.7% month-on-month in April, in contrast to a 1.6% increase in March. Imports were down 1.3% in April.
The British pound sterling rose 0.36% to $1.2738. At one stage, the sterling had strengthened to $1.2763.
In UK, house prices increased for a second straight month in May, although the pace of growth slowed from April.
The Japanese yen was higher by nearly 0.25% with a unit of dollar fetching 108.15 yen, as against 108.40 yen late Thursday.
The greenback lost about 0.6% against the loonie at 1.3281 after Canada's employment data turned out to be encouraging. Against Swiss franc, the dollar shed around 0.4% at 0.9871.
Against the Aussie, the dollar was up more than 0.3%, with the Aussie-greenback pair quoting at 0.6999.
Data from the Labor Department showed non-farm payroll employment in the U.S. rose by 75,000 jobs in May after soaring by a downwardly revised 224,000 in April.
Economists had expected employment to increase by about 185,000 jobs compared to an increase of 263,000 jobs originally reported for the previous month.
Meanwhile, the report said the unemployment rate came in at 3.6% in May, unchanged from the previous month and in line with economist estimates.
The unemployment rate remained at a nearly 50-year low as a 113,000-person increase in the household survey measure of employment was offset by a 176,000-person jump in the size of the labor force.
In other economic news from U.S. today, a report from the Commerce Department showed wholesale inventories in the country increased slightly more than expected in the month of April, climbing by 0.8% after coming in virtually unchanged in March. Expectations were for a 0.7% increase.
A report released by the Federal Reserve said consumer credit in the U.S. jumped by much more than anticipated in the month of April, rising $17.5 billion, after climbing by an upwardly revised $11.0 billion in March. Economists had expected consumer credit to rise by $12.0 billion.
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