FX Roundup: Dollar slides on US jobs data, EM currencies falter

The dollar retreated against a basket of global currencies on Friday following lacklustre US jobs data.

A report on US non-farm payrolls showed 142,000 jobs were added in September, comfortably below the 201,000 reading analysts had estimated.

Furthermore, revisions to the prior month's data revealed 136,000 jobs were added, down from a preliminary estimate of 173,000.

Both the pound sterling and the euro rose at the greenback’s expense in wake of the report, up 0.46% and 0.88% to change hands at $1.5201 and $1.1294 respectively. The dollar also fell against the yen shedding 0.81% exchanging at JPY118.96 and heading lower in early trading stateside.

Selected commodities-linked currencies also got respite with the dollar falling 0.21% against the Canadian dollar and 0.96% against the Norwegian Krone changing hands at CAD$1.3240 and NOK8.3464 respectively.

The New Zealand dollar also rose 0.33% against the greenback to change hands at US$0.6420, but the Australian dollar shed 0.20% changing hands at US$0.7016 halting four sessions in positive territory.

FXTM research analyst Lukman Otunuga said, “With employment failing to thrive in the US economy, this affects one of the US Federal Reserve’s two mandates to promote maximum sustainable employment.

“USD weakness may take the spotlight as market participants reduce their bets on a rate rise, as this negative job data has offered a compelling reason for the Fed to put off raising rates in 2015.”

Angus Campbell, senior analyst at FxPro, also felt the jobs data puts the chances of a 2015 rate hike from the Fed into serious doubt. “As if that wasn’t enough the average earnings data disappointed coming in at 0.0% month-on-month all culminating in a serious readjustment of rate expectations in the bond market, which saw US Treasuries spike and the dollar plunge.”

Meanwhile, emerging market currencies continued to falter. The dollar rose against Singapore dollar (up 0.08%), Korean won (up 0.36%), Thai baht (up 0.08%), Taiwan dollar (0.22%) and Malaysian ringgit (up 0.19%) for yet another session.