* U.S. added more jobs than expected in October
* U.S. manufacturing contracted in October
* Dollar weighed down by trade optimism, slowdown fears
(Updates prices)
By Karen Brettell
NEW YORK, Nov 1 (Reuters) - The dollar dropped on Friday
after data showed a mixed view on the economy, and as optimism
that the United States and China will reach a deal to end their
trade war reduced safe-haven demand for the greenback.
The dollar initially gained after U.S. jobs growth slowed
less than expected in October, while wages gained and hiring in
the prior two months was stronger than previously estimated.
“The data is much better than expected. Markets were braced,
certainly in headline terms, for some much weaker numbers given
the expected impact from the GM strike and the census hiring. So
very good data in that context,” said Shaun Osborne, chief
foreign exchange strategist at Scotiabank in Toronto.
Striking workers who do not receive a paycheck during the
payrolls survey period are treated as unemployed. The strike by
about 46,000 workers at GM plants in Michigan and Kentucky ended
last Friday.
Temporary census workers also left their jobs during the
month.
The U.S. currency was unable to hold onto the gains,
however, and was further dented after the Institute for Supply
Management (ISM) said the manufacturing sector contracted for
the third consecutive month in October. The dollar index against a basket of six major currencies
.DXY fell to 97.24, down 0.12% on the day. It earlier rose to
97.45 on the jobs data.
The dollar has weakened since the Federal Reserve on
Wednesday cut interest rates for the third time this year, and
indicated that further reductions may not be forthcoming.
Concerns about a slowing American economy is weighing on the
greenback, however, with the U.S. central bank expected to
resume rate cuts if the economic data worsens.
“There is a bit more vulnerability starting to feed into the
dollar, with perhaps the U.S. economy slowing down,” Osborne
said.
Fed Vice Chair Richard Clarida said on Friday that the rate
cuts put into effect leave the U.S. economy better armed to
withstand the risks of a global slowdown. Safe-haven flows into the U.S. currency have also weakened
on optimism that the United States and China are close to
reaching a deal to end their trade war, which has been blamed
for slowing global growth.
U.S. Trade Representative Robert Lighthizer and Treasury
Secretary Steven Mnuchin made progress on a variety of issues
during a telephone call on Friday with China's Vice Premier Liu
He about an interim trade agreement, USTR said in a statement on
Friday. ========================================================
Currency bid prices at 2:06PM (1806 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1160 $1.1150 +0.09% -2.69% +1.1171 +1.1129
Dollar/Yen JPY= 108.2200 108.0200 +0.19% -1.85% +108.3200 +107.9000
Euro/Yen EURJPY= 120.80 120.46 +0.28% -4.29% +120.9300 +120.3700
Dollar/Swiss CHF= 0.9856 0.9863 -0.07% +0.43% +0.9894 +0.9854
Sterling/Dollar GBP= 1.2935 1.2940 -0.04% +1.40% +1.2972 +1.2928
Dollar/Canadian CAD= 1.3139 1.3159 -0.15% -3.65% +1.3195 +1.3139
Australian/Doll AUD= 0.6911 0.6893 +0.26% -1.96% +0.6920 +0.6885
ar
Euro/Swiss EURCHF= 1.1002 1.0999 +0.03% -2.24% +1.1027 +1.0999
Euro/Sterling EURGBP= 0.8628 0.8615 +0.15% -3.96% +0.8636 +0.8596
NZ NZD= 0.6436 0.6411 +0.39% -4.18% +0.6455 +0.6407
Dollar/Dollar
Dollar/Norway NOK= 9.0924 9.1906 -1.07% +5.25% +9.1983 +9.0864
Euro/Norway EURNOK= 10.1508 10.2490 -0.96% +2.47% +10.2585 +10.1500
Dollar/Sweden SEK= 9.5671 9.6499 -0.77% +6.73% +9.6563 +9.5517
Euro/Sweden EURSEK= 10.6812 10.7641 -0.77% +4.06% +10.7710 +10.6700