Dollar falls to more than two-week low after weak U.S. jobs report

June 3, 2016 10:35 AM

The dollar fell to the lowest level in more than two weeks on Friday after the U.S. jobs report came in far below expectations and cast doubt on whether the Federal Reserve would raise U.S. interest rates soon.

The dollar index, which measures the greenback against a basket of major currencies, fell more than 1% after the release of the data.

U.S. employers added only 38,000 jobs in May, the lowest number in more than five years, the Commerce Department reported, with the goods-producing sector shedding 36,000 positions.

"The Fed was pretty much in line to raise rates on June 15," said Russell Price, senior economist at Ameriprise Financial Services Inc in Troy, Michigan. "I think this is the number that really puts them on hold. It shows the American economy has lost some momentum."

Fed funds futures rates showed traders see only a 4% chance that the central bank will raise interest rates at its June 14-15 policy meeting, down from a 21% chance on Thursday, according to CME Group's FedWatch tool.

The dollar index dropped 1.2% to 94.366, its lowest since May 18.

Against the yen, the dollar fell 1.25% to 107.85, its lowest since May 9.

The euro rose 1.3% against the dollar to $1.1275, its highest level since May 9.

About the Author