FX round-up: Dollar and sterling dive after 'awful' US jobs data

Spooked investors dumped the dollar and sterling in a grim session sparked by "awful" US jobs data that likely ruled out an anticipated June or July rate hike by the US Federal Reserve.

At 17:05 BST, sterling was down on most major crosses, but had eked out gains against a severely bruised greenback. It rose 0.67% to $1.4520. The dollar-spot index had tanked 1.48% to $94.145.

The dollar's dive followed US non-farms payroll data for May that revealed just 38,000 jobs were added, against an expected 160,000. This was the weakest report since September 2010, and it saw traders bolt for cover.

"There was no sugar coating this jobs report, it was a simply awful number, missing the worst of expectations," said CMC Markets' chief market analyst, Michael Hewson.

US and European stock markets reacted instantly, the DAX, CAC 40, Dow Jones Industrial Average and S&P 500 all softened. London's FTSE 100 firmed, however, thanks to a bounce in most commodity prices as the US currency got whacked and in absence of otherwise ubiquitous Brexit polls.

Commodity currencies benefited amid the welter of forex repositioning. Sterling fell up to 1% against the kiwi, aussie and loonie, but the greenback lost 1%-2% against those same units, emphasising the dour market mood.

Fellow commodity unit the South African rand rose -- sterling was down 2.33% to 21.9387 rand and the dollar fell 3% to 15.1105 rand -- as S&P Global kept its ratings on the nation unchanged and gave it reprieve from a junk assessment.

West Texas Intermediate and Brent crude had flopped below $50 a barrel, but safe-haven and dollar-inverse gold stacked on about 2.4% to be trading around $1,242 an ounce.

Services purchasing-managers' indices on both sides of the Atlantic for May offered little help. The UK's beat market views, as did the US's and Eurozone's, the latter comprising in-line prints from France and Germany.

Meantime, sterling was down 1.18% to 155.160 yen. The greenback -- moving on the jobs data ahead of a smaller than expected US trade deficit for April announced today -- fell 1.86% to 106.85 yen.

Japan's currency has blazed a month-long trail north against the dollar, extended again today, with market chat on the potential for a Bank of Japan (BoJ) intervention again gaining traction as its economy feels the pinch.

Any hopes held by BoJ governor Haruhiko Kuroda and European Central Bank president Mario Draghi for a June rate hike by the Fed appeared to evaporate with the dollar decline.

Danske Bank commented that today's US jobs data meant it was "unlikely that the Fed will hike over the coming months." All attentions will now be focused on Fed chair Janet Yellen's speech next week.

All of this comes after two weeks of apparently hawkish jawboning by some Fed officicals, but not all, which were seen to imply a June or July rate hike was possible, albeit depending on actual data prints.

Federal Reserve bank of Chicago boss Charles Evans said today that the economic backdrop had improved enough that two further interest interest rate hikes would be appropriate in 2016.

But, Evans added, there might be arguments to be made in favour of holding off until core inflation had reached 2%.

Taking all of this into consideration, some traders were already beginning to shift their gaze to autumn.