The dollar inched lower on Friday, giving up gains fueled

The greenback hit session highs against the Japanese yen and euro following the jobs report, after trading lower for most of the session. But by afternoon trading, the dollar’s rally faded.

The dollar was down roughly 1% against the yen this week, its worst weekly percentage loss in two months.

Data showed U.S. nonfarm payrolls increased by 136,000 jobs last month. August data was revised to show 168,000 jobs created instead of the previously reported 130,000. Economists polled by Reuters had forecast payrolls would increase by 145,000 jobs in September. “Given that market expectations have shifted after the ADP (private payrolls) and ISM (manufacturing and services), people were bracing for something worse than this,” said Shaun Osborne, chief market strategist, at Scotiabank in Toronto.

Data from the U.S. payrolls processor ADP showed the U.S. private sector jobs added 135,000 jobs last month, below the 140,000 forecast, suggesting trade tensions, which have pressured manufacturing, could be spilling over to the labor market.

The non-manufacturing data came on the heels of ISM’s manufacturing survey on Tuesday that showed activity plunging to more than 10-year lows.

“There are other issues here for the dollar aside from the Fed easing, such as the U.S. political backdrop. And we’re still looking at the funding tightness issue,” Osborne said.

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