NEW YORK- The dollar dropped from three-month high, weighed down by what analysts viewed as a mixed US nonfarm payrolls report for June, that showed a strong headline number but with some weak components.
Volume is expected to thin out later in the session ahead of the July Fourth holiday weekend.
Despite a soft dollar on Friday, it posted the week on a positive note, with an 0.5 percent gain. Going into the report, the dollar traded higher on the expectation of a robust jobs number.
Data showed that US nonfarm payrolls did beat expectations, increasing by 850,000 jobs last month after rising 583,000 in May. But the unemployment rate rose to 5.9 percent from 5.8 percent in May, while the closely watched average hourly earnings, a gauge of wage inflation, rose 0.3 percent last month, lower than the consensus forecast for a 0.4 percent increase.
Analysts said overall the report was strong and trended in the right direction, which should cement the case for the Federal Reserve to start tapering its asset purchases soon. That should be positive for the dollar.
In early afternoon trading, the dollar index was down 0.3 percent at 92.246, after earlier hitting a three-month high of 92.759.
The greenback has strengthened broadly since the Federal Open Market Committee (FOMC) surprised markets last month by signaling it could tighten policy earlier than expected to curb inflation.
