NEW YORK- The dollar was little changed on Friday after a rally in response to mixed data that suggested the world’s largest economy showed pockets of weakness but remained resilient overall.
The dollar index was flat at 102.43 in afternoon trading after hitting 103.10 in wake of the stronger-than-expected US jobs report. That was the highest since mid-December.
For the week, the dollar gained 1.1 percent , on pace for its best weekly rise since mid-July.
The greenback earlier rallied after data showed the US economy created 216,000 new jobs in December, exceeding the consensus forecast of 170,000. The unemployment rate was steady from November at 3.7 percent , compared with expectations of a rise to 3.8 percent , while average earnings rose 0.4 percent on a monthly basis, against forecasts of a 0.3 percent gain.
But that report was offset by data later in the session that indicated the US services sector slumped last month.
The Institute for Supply Management (ISM) said its non-manufacturing index fell to 50.6 last month, the lowest reading since May, from 52.7 in November. The services industry accounts for more than two-thirds of the economy. Economists polled by Reuters had forecast the index little changed at 52.6.
More importantly, the ISM’s measure of services sector employment plunged to 43.3 last month, the lowest since July 2020 when the economy was reeling from the first wave of the pandemic. The index was at 50.7 in November.
The dollar fell after the ISM report, dropping to session lows below 102. The US currency subsequently trimmed losses.
“At the end of the day, this is about market positioning,” said Marc Chandler, chief market strategist at Bannockburn Forex in New York.
“I see big outside days in the dollar index and I see net little changed on the day. The market lacks conviction and we should expect some broad consolidation maybe within today’s range for the next few days.”