NEW YORK: The US dollar was lower against the euro on Friday after a disappointing employment report for August dimmed expectations that the Federal Reserve might accelerate its planned rate hike next year.
Hopes that the US would turn in a seventh straight month of strong jobs generation were dashed when August's number came in at just 142,000 net new positions, 80,000 less than expected.
The Labor Department data supported the view that the economy is still struggling to pick up speed, and that wages remain very flat, holding back consumer spending.
That in turn took some pressure off the Fed to address growing talk of a looming inflation threat. The Fed has projected a rate hike for the second half of 2015, but inflation hawks were pressing for one in the early part of the year.
"Significant slack remains, and thus monetary policy needs to be patient in removing stimulus," said Eric Rosengren, head of the Boston Federal Reserve branch.
The dollar nevertheless remained below $1.30 per euro, the level it broke for the first time in more than a year on Thursday after the European Central Bank unexpectedly cut interest rates and announced an asset purchase program to boost the economy.
The dollar's upward march against the yen also took a minor breather Friday, and the euro slipped lower against the Japanese currency as well.
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