Dollar weakens on soft U.S. July jobs report

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Investing.com - The dollar weakened against most major currencies on Friday after a less-than-stellar U.S. jobs report sent investors selling the currency for profits.

In U.S. trading on Friday, EUR/USD was up 0.27% at 1.3426.

The Labor Department reported earlier that the U.S. economy added 209,000 jobs in July, missing expectations for an increase of 233,000. The number of jobs added in June was revised up to a 298,000 gain from a previously estimated rise of 288,000.

The report also showed that the U.S. unemployment rate ticked up to 6.2% last month from 6.1% in June. Analysts had expected the rate to remain unchanged in July.

Investors sold the dollar for profits upon release of data to reexamine how much time will past from when the Federal Reserve will wind down its bond-buying stimulus program and when it will begin hiking benchmark interest rates.

While the economy is improving, the Fed noted in its July statement on monetary policy this week that slackness remains in the labor market.

Elsewhere, the revised Thomson Reuters/University of Michigan consumer sentiment index rose to 81.8 in July from 81.3 in June, missing expectations for a reading of 82.0, which added to Friday's profit taking.

Separately in the U.S., the Institute of Supply Management reported that the U.S. manufacturing purchasing managers' index rose to 57.1 in July from 55.3 in June, beating expectations for an increase to 56.0, though investors avoided the greenback due to jobs and sentiments reports.

Meanwhile in Europe, the Markit research group said that Germany's manufacturing purchasing managers' index fell to 52.4 last month from 52.9 in June. Analysts had expected the index to remain unchanged.

For the entire euro zone, Markit said the manufacturing PMI ticked down to 51.8 in July, from a reading of 51.9 the previous month. Analysts had also expected the index to remain unchanged.

Meanwhile in Asia, official data showed that China's manufacturing PMI rose to 51.7 from 51.0 in July, beating market expectations for a 51.4 reading.

Still, China's HSBC final manufacturing PMI ticked down to 51.7 last month from 52.0. Analysts had expected the index to remain unchanged, which sent investors flocking to safe-haven positions in gold, which tends to trade inversely with the dollar.

Elsewhere, Argentina defaulted on its debts this week, which sparked fears markets could roil on the event, while concerns that tensions in Ukraine and Gaza will dampen global recovery also boosted demand for the yellow metal.

The dollar was down against the yen, with USD/JPY down 0.20% at 102.59, and down against the Swiss franc, with USD/CHF down 0.29% at 0.9062.

The greenback was up against the pound, with GBP/USD down 0.35% at 1.6828.

Markit Economics reported earlier that its U.K. manufacturing purchasing managers' index fell to 55.4 last month, down from 57.5 in June. Analysts had expected the index to slip to 57.2 in July, and numbers weakened the pound.

A day earlier on Thursday, the Nationwide Building Society reported that property values rose 0.1% in July from June, missing market calls for a 0.5% reading, which softened the pound.

Property values rose 10.6% on year in July, below expectations for a reading of 11.3%

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.16% at 1.0921, AUD/USD up 0.20% at 0.9313 and NZD/USD up 0.04% at 0.8504.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.16% at 81.41.

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