The U.S. dollar slipped against a basket of major currencies on Thursday after U.S. jobs data lagged expectations, pushing out bets for a Federal Reserve rate hike to 2016, while caution ahead of this weekend's Greek referendum limited losses.
Nonfarm payrolls increased by 223,000 last month, the Labor Department said. Adding to the report's soft note, April and May data was revised to show 60,000 fewer jobs were added than previously reported. While the unemployment rate fell two-tenths of a percentage point to 5.3 percent, the labor force participation rate fell to the weakest since October 1977.
"The numbers overall were disappointing, and it calls into question the September rate increase and maybe even the December," said Chris Gaffney, president of EverBank World Markets in St. Louis, in reference to the date the Fed is expected to hike rates.
After the data, futures contracts showed that traders saw January as the first Fed meeting at which a rate hike is more likely than not, based on CME FedWatch, which tracks expectations using its Fed funds futures contracts. Rate hikes are seen as boosting the dollar by driving investment flows into the United States.
While the dollar fell from a nearly one-week high against the yen, a five-week high against the Swiss franc, and a 3-1/2-week high against a basket of six major currencies, the losses were limited and the greenback remained above Wednesday's session lows.
Analysts said the move was muted because market participants were awaiting the outcome of Greece's July 5 referendum on a bailout deal and were abstaining from making sizable bets ahead of the U.S. July 4 Independence Day holiday.
"The outcome of the referendum is highly uncertain at this point," said Sireen Harajli, a foreign exchange strategist at Mizuho Corporate Bank in New York. "Markets are in a wait-and-see mode until this whole situation with Greece becomes clearer."
The euro was last up 0.23 percent against the dollar at $1.1077 after hitting a session high of $1.11220 after the jobs data. The dollar was last down 0.07 percent against the yen at 123.07 yen after hitting a session low of 122.970 yen.
The dollar was 0.43 percent lower against the at 0.944 franc after hitting a session low of 0.94205 franc.
The dollar index, which measures the greenback against a basket of six major currencies, was last down 0.19 percent at 96.13.