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Dollar weaker after disappointing jobs number, peso rises on trade news

Kham | Reuters

The dollar dropped on Friday after a disappointing jobs number signaled a weakening labor market.

The economy added 75,000 jobs in May. Economists polled by Dow Jones were expecting 180,000 jobs in May.

The dollar index fell 0.47% to $96.59.

The dollar was headed on Friday for its worst week since December. The prospects of the Fed's reacting to an escalating China-U.S. trade row by cutting rates has dragged the dollar to a two-month low this week and helped the euro rise above $1.13.

On Friday, however, the euro relinquished all its gains from Thursday after a policy review by the European Central Bank that was less dovish than expected.

The ECB on Thursday ruled out raising rates in the next year and even opened the door to buying more bonds as a global trade war and Brexit drag the euro zone economy down.

But the market been expecting a stronger hint of rate cut, and consequently the euro and euro zone bond yields rose, putting more pressure on the dollar.

The euro was down 0.55% to $1.1337 but still set for a weekly gain of 0.9%, its best weekly performance against the dollar since late September last year, when it rose nearly 1.1%.

The Mexican peso rose when President Donald Trump said on Friday that Mexico may be able to avert tariffs on its goods by purchasing American agricultural products.

President Trump tweeted the news.

The Mexican currency was up 0.46% at $19.60.