The U.S. dollar drifted lower against some of its major rivals Friday morning after data showed a much smaller than expected increase in employment in the month of November.
However, the dollar recovered amid increasing prospects of the Federal Reserve beginning to rise interest rates by mid 2022.
Data released by the Labor Department showed non-farm payroll employment rose by 210,000 jobs in November after surging by an upwardly revised 546,000 jobs in October. Economists had expected employment to spike by 550,000 jobs compared to the jump of 531,000 jobs originally reported for the previous month.
Despite the much weaker than expected job growth, the unemployment rate slid to 4.2% in November from 4.6% in October. Economists had expected the unemployment rate to edge down to 4.5%.
With the much bigger than expected decrease, the unemployment rate fell to its lowest level since hitting 3.5% in February of 2020.
A report from the Institute for Supply Management showed an unexpected acceleration in the pace of growth in U.S. service sector activity in the month of November.
The ISM said its services PMI rose to a record high 69.1 in November from 66.7 in October, with a reading above 50 indicating growth in the sector. The increase surprised economists, who had expected the index to dip to 65.0.
The Commerce Department said factory orders surged up by 1% in October after climbing by an upwardly revised 0.5% in September. Economists had expected factory orders to increase by 0.5% compared to the 0.2% uptick originally reported for the previous month.
U.S. senators passed a stopgap spending bill to keep the government funded through February 18, ahead of today's deadline.
The bill was approved by a vote of 69-28, amid stiff opposition from Republicans regarding Biden's Covid-19 vaccine mandates.
The dollar index drifted down to 95.97 after jobs data, but swiftly rebounded into positive territory and rose to 96.45 before sliding lower again. The index is currently at 96.16, its previous closing level.
Against the Euro, the dollar weakened a bit to $1.1311, down 0.07% from the previous close. Data from Eurostat showed that Eurozone retail sales increased in October after falling in the previous month.
Retail sales grew 0.2% month-on-month in October, as expected, reversing a 0.4% fall in September.
The dollar is trading at $1.3233 against Pound Sterling, firming from $1.3306 a sterling.
The dollar is trading at 112.81 yen, weakening from 113.18.
Against the Aussie, the dollar firmed to 0.6996 from 0.7094.
The Swiss franc strengthened to 0.9180 against the dollar, rising from 0.9202.
The Loonie firmed to 1.2744 against the dollar after oil prices rose and data showed a much bigger than expected increase in addition of jobs in November, but dropped to 1.2848 after the commodity pared gains amid uncertainty about the outlook for energy demand.