The US dollar slipped to its lowest since the election of Donald Trump last November after a miss in the country’s job creation numbers in May.
At publication time, the dollar index was down 0.52 per cent against a basket of its major trading peers at 96.720 – the weakest since president Trump’s election.
The dollar was holding steady before the payrolls report which showed the US economy added 138,000 jobs last month (forecast: 185,000). Still May’s growth was enough to push the US’s overall unemployment rate from 4.4 per cent to 4.3 per cent – the lowest since 2001.
US 10-year treasury yields slipped 4.4 basis points to 2.185 per cent – the lowest since April 18 – but the 2-year yield, most sensitive to potential changes in monetary policy, was little moved.
April’s gain was revised lower to 174,000 from 211,000 previously. Today’s report comes two weeks before the Federal Reserve’s latest policy meeting.
“This is not what financial markets were expecting”, said Paul Diggle, economist at Aberdeen Asset Management.
“The decline in unemployment and participation plus poor wage growth presents the Fed with a bit of a conundrum. The labour market appears to be getting tighter and tighter, but wages just aren’t responding.”