U.S. Dollar Slumps on Weak Jobs Report

The U.S. dollar fell on Friday after the American economy added fewer jobs than expected last month.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, fell 0.4% to a seven-week low of 96.607 by 9:57 AM ET (13:57 GMT).

The U.S. economy created 75,000 jobs in May, much fewer than expected, while wage inflation eased, the Labor Department reported.

The data increases expectations that the Fed will cut rates as the job market peaks. Expectations were already higher that the central bank will cut rates due to trade tensions between the U.S. and China and lowered growth forecasts around the globe.

Fed Chairman Jerome Powell indicated this week that the central bank would “act as appropriate to sustain the economic expansion.”

The possibility of a rate cut in June rose to 33.3% from 20% earlier, while the expectation for rates to be lower in December is at 98%, according to Investing.com’s Fed Rate Monitor Tool.

The dollar was lower against the safe-haven Japaese yen, with USD/JPY falling 0.3% to 108.04.

Meanwhile, the euro jumped to a seven-week high with EUR/USD rising 0.4% to 1.1318.

Sterling was also higher, with GBP/USD gaining 0.4% to 1.2745, while USD/CAD slipped 0.6% to 1.3281.