Dollar posts minor gains after mixed US jobs report

A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto

By Karen Brettell

NEW YORK (Reuters) - The dollar erased earlier losses and edged higher against the euro and Japanese yen on Friday after the August jobs report showed a still strong labor market, despite some signs of deterioration.

Employers added 187,000 jobs in August, above expectations for a 170,000 gain. The unemployment rate rose to 3.8%, above the expected 3.5%. Average hourly earnings rose by 4.3% for the year, below expectations for a 4.4% gain.

Data for July was also revised lower to show 157,000 jobs added instead of the previously reported 187,000.

"Today's jobs report provides investors the best of both worlds. It's the labor market softening just enough to keep the Fed at bay while it's strong enough to prevent an economic recession," said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.

The dollar index was last up 0.10% at 103.71. The euro dipped 0.04% to $1.0837. The greenback rose 0.04% to 145.61 Japanese yen, after earlier falling to 144.44, the lowest level since Aug. 11.

Fed funds futures traders are now pricing in a 93% likelihood that the Federal Reserve will leave rates unchanged at its Sept. 19-20 meeting and see only a 37% chance of a hike in November, according to the CME Group's FedWatch Tool.

Some special circumstances impacted the employment report.

There were almost 18,000 workers on strike during the period data was gathered, including 16,000 Screen Actors Guild-American Federation of Television and Radio Artists members.

Yellow trucking also filed for Chapter 11 bankruptcy in early August, leaving about 30,000 workers unemployed.

Thomas Simons, a money market economist at Jefferies, noted that it was "overall, a strong month ex-Yellow," but added that it's "hard to get excited given the downward revisions."

Other data on Friday showed that U.S. manufacturing contracted for a 10th straight month in August, but the pace of decline continued to slow, suggesting that the sector could be stabilizing at lower levels.

Elsewhere, European Central Bank policymaker Boris Vujcic said on Friday that weaker economic growth could bring euro zone inflation down faster, but a resilient labor market continues to produce quick wage growth, creating upside risk for prices.

ECB policymaker Francois Villeroy de Galhau also said that the ECB has a range of options at its next interest rate meeting, although interest rates are near their high point and there are signs underlying inflation has peaked.

Money markets are pricing in a 77% likelihood that the ECB will leave rates unchanged at its September meeting.


Currency bid prices at 10:10AM (1410 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change


Dollar index 103.7100 103.6300 +0.10% 0.213% +103.8300 +103.2600

Euro/Dollar $1.0837 $1.0843 -0.04% +1.15% +$1.0882 +$1.0822

Dollar/Yen 145.6100 145.5450 +0.04% +11.05% +145.7550 +144.4400

Euro/Yen 157.79 157.80 -0.01% +12.47% +157.9600 +157.0600

Dollar/Swiss 0.8831 0.8834 -0.06% -4.53% +0.8843 +0.8796

Sterling/Dollar $1.2653 $1.2672 -0.14% +4.64% +$1.2712 +$1.2640

Dollar/Canadian 1.3566 1.3509 +0.41% +0.12% +1.3575 +1.3490

Aussie/Dollar $0.6469 $0.6485 -0.24% -5.09% +$0.6521 +$0.6446

Euro/Swiss 0.9567 0.9576 -0.09% -3.31% +0.9582 +0.9565

Euro/Sterling 0.8563 0.8554 +0.11% -3.18% +0.8573 +0.8549

NZ $0.5968 $0.5966 +0.05% -5.99% +$0.6015 +$0.5945


Dollar/Norway 10.5910 10.6260 -0.24% +8.01% +10.6550 +10.5460

Euro/Norway 11.4811 11.5270 -0.40% +9.41% +11.5518 +11.4520

Dollar/Sweden 10.9769 10.9484 +0.17% +5.45% +11.0113 +10.8956

Euro/Sweden 11.8960 11.8764 +0.17% +6.69% +11.9261 +11.8566

(Reporting by Karen Brettell; Additional reporting by Herb Lash; Editing by Alex Richardson and Paul Simao)