The dollar fell on Friday, undermined by the ongoing trade dispute between China and the United States and a report showing the U.S. economy in March created the fewest jobs in six months.
The greenback slid against the safe-haven yen and Swiss franc in the wake of new comments from China. China on Friday warned it would fight back "at any cost," hours after U.S. President Donald Trump threatened to slap tariffs on an additional $100 billion in Chinese goods.
Losses in the dollar escalated after China's Commerce Ministry spokesman Gao Feng said the country will not hesitate to respond if the United States adds further tariffs. He ruled out negotiations under these conditions.
The U.S.-China trade dispute outweighed a U.S. payrolls report that showed fewer job gains than expected, as well as generally upbeat remarks on the economy from Federal Reserve Chairman Jerome Powell.
"It is currently a bipolar market for currencies. On the one hand, Powell is saying that the U.S. economy is doing well and we're getting these rate increases, even though they're at a gradual pace, but the FX market is simply ignoring him," said Juan Perez, currency trader, at Tempus Consulting in Washington.
"The reason for this is that the FX market is more focused on the trade dispute with China, which has a far greater chance of derailing U.S. growth when you think about the consequences on the economy," he added.
Powell said on Friday the Fed will likely need to keep raising U.S. interest rates to keep inflation under control.
In afternoon trading, the and Swiss franc, two currencies investors buy in times of market stress, rallied, with the dollar falling 0.47 percent to 106.87 yen and declining 0.47 percent to 0.9587 franc.
Friday's U.S. nonfarm payrolls report showed an increase of just 103,000 jobs in March, well below the market forecast of 193,000 and February's surge of 326,000. The bright spot though was a 0.3 percent monthly rise in wage growth, which pushed the annual wage growth rate higher. The report pressured the dollar, but not as much as the China trade story.
Paul Ashworth, chief U.S. economist at Capital Economics in Toronto, said wage growth, like core inflation, "is still muted, but there is clear evidence of an acceleration over the past few months in the monthly gains."
"Overall, looking through the volatility, employment growth is trending higher and wage growth is starting to heat up," he added.