June 5, 2020 / 12:40 AM / a month ago

Dollar lifted by jobs data, but records third straight weekly loss

FILE PHOTO: A man counts U.S. dollars in Tehran, Iran July 7, 2019. Nazanin Tabatabaee/ WANA (West Asia News Agency) via REUTERS.

NEW YORK (Reuters) - The dollar was modestly higher on Friday after data showed the U.S. labor market unexpectedly improved in May, but the currency ended the week lower, for a third consecutive week, as uncertainty about the U.S. economy capped gains.

The Labor Department’s employment report showed the jobless rate fell to 13.3% last month from 14.7% in April, which was a post-World War Two high. It came on the heel of surveys showing consumer confidence, manufacturing and services industries stabilizing. Economic conditions have significantly improved as businesses have begun to reopen after shuttering in mid-March to slow the spread of COVID-19.

The U.S. dollar index =USD late Friday was up 0.18% to 96.93. It was down 1.4% from last Friday's close. On the day, the dollar was 0.38% stronger against the euro EUR=, at $1.129. Against the safe-haven Japanese yen JPY=, the dollar was up 0.44% to 109.61 yen.

“Today you’ve seen better-than-expected economic data coming out of the U.S. in terms of the jobs numbers,” said Chuck Tomes, portfolio manager at Manulife Asset Management. “The reaction on the back of that has been expectations of better growth coming out of the U.S. as well as a steepening yield curve, both of which have provided a lift to the dollar.”

The uncertainties about the economic outlook and the possibilities of a second wave of infections had capped the greenback’s gains, Tomes added.

Some analysts said the May job gains in might not soon be repeated.

“While this was no doubt a great jobs report, a lot of good news was already priced in. Future estimates and expectations on the economic rebound are likely higher from here and therefore harder to meet or beat,” said Matt Miskin, co-chief investment strategist at John Hancock Investment Management.

The dollar’s strengthening was less visible against the euro, and in the dollar index, which heavily weights the euro, after the single currency rose following the European Central Bank’s announcement Thursday that it was expanding its stimulus program.

The euro jumped 1.73% this week, its third straight weekly rise, though it was lower on the day.

Reporting by Kate Duguid in New York; Additional reporting by Julien Ponthus in London; Editing by Chris Reese and Leslie Adler

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