Forex - Dollar drops on solid employment, consumer sentiment data

Investing.com - The dollar weakened against most major currencies on Friday after the U.S. January jobs report largely met expectations, while solid consumer sentiment figures also enticed investors out of the safe-haven greenback.

In U.S. trading on Friday, EUR/USD was up 0.64% at 1.3665.

The U.S. Bureau of Labor Statistics reported earlier that the economy added a net 157,000 jobs in January, roughly in line with expectations for a gain of 160,000.

December's numbers were revised to 196,000 from 155,000, while November's figures were revised to 247,000 from 161,000.

The headline unemployment rate rose to 7.9% from 7.8% in December.

Investors were bracing for a possible disappointing jobs report earlier this week, and the figures boosted spirits in markets worldwide, fueling appetite for risk that came at the dollar's expense.

Elsewhere, the Thomson Reuters/University of Michigan's final reading of its consumer sentiment index improved to 73.8 in January from 71.3 the previous month, beating expectations for a reading of 71.5.

Separately, the Institute of Supply Management said that its manufacturing purchasing managers' index rose to 53.1 last month from 50.2 in December, well above expectations for a rise to 50.6.

Meanwhile in Europe, the Markit research group earlier reported that Spain's manufacturing PMI rose to 46.1 in January from a reading of 44.6 in December, beating expectations for an improvement to 45.5, while the eurozone's manufacturing PMI rose to 47.9 in January from 47.5, beating expectations for the index to remain unchanged.

The dollar also fell after official data revealed that the eurozone's unemployment rate remained unchanged at 11.7% in December, compared to expectations for a rise to 11.9%.

Elsewhere, the eurozone's preliminary consumer price index slipped to an annualized rate of 2.0% in January from 2.2% the previous month. Analysts had expected inflation to remain unchanged last month.

The greenback, meanwhile, was up against the pound, with GBP/USD trading down 0.92% at 1.5712.

Earlier Friday, the Markit research group reported that the U.K. manufacturing purchasing managers' index fell to 50.8 in January from 51.2 in December, outpacing analysts' calls for a decline to 51.0.

The pound slid amid an otherwise risk-on trading day on sentiments U.K. recovery may be waning.

Data last week revealed that the U.K. economy contracted 0.3% in the fourth quarter, putting Britain on track for a triple-dip recession.

The dollar rose against the yen, with USD/JPY trading up 1.15% at 92.77 and was down against the Swiss franc, with USD/CHF trading down 0.37% at 0.9068.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD trading flat 0.9974, AUD/USD down 0.14% at 1.0412 and NZD/USD trading up 0.76% at 0.8454.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.14% at 79.12.