The dollar fell on Friday in choppy trading after the US employment report showed a smaller-than-expected rise in wages last month despite strong jobs gains, likely prompting the Federal Reserve to be less aggressive in raising interest rates this year. The greenback has struggled amid concerns about the Trump administration's preference for a weak dollar. It posted its worst January in percentage terms in 30 years.
So far this week, the trend continues to be lower. The dollar was down 2.3 percent against the yen this week, on track for its worst weekly performance since late July.
Further compounding the dollar's anaemic trend this year was Friday's report showing that January non-farm payrolls rose by 227,000 jobs, the largest gain in four months. But the unemployment rate rose one-tenth of a percentage point to 4.8 percent and wages increased modestly, suggesting there was still some slack in the labour market that would keep inflation in check.
As a result, Fed fund futures priced in a slim chance of a rate hike in March on Friday after the jobs data, according to the CME Group's FedWatch. Rate futures have instead priced in a June hike, with a probability of more than 60 percent.
In midday trading, the dollar index, which tracks the greenback versus six top currencies, slipped 0.1 percent to 99.666.
Against the yen, the dollar was down 0.3 percent at 112.46 yen. The euro, meanwhile, was up 0.2 percent against the dollar at $1.0784.
January's US non-manufacturing index also showed a reading of 56.5, slightly lower than the market's 57.0 forecast.
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