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US jobs growth has missed expectations, adding 75,000 jobs in May rather than the 185,000 expected by analysts.
But the US unemployment rate remained steady at 3.6%, its lowest level for 50 years, according to official figures.
The dollar dropped as investors assumed the slower-than-expected job growth meant a rate cut by the US Federal Reserve was more likely.
The number of unemployed people was “little changed” at 5.9 million, the Bureau of Labor Statistics said.
The US dollar fell more than 0.4% against the pound, the euro and the yen after the jobs figures were published.
“While the US jobless rate remains at its historic low of 3.6%, far fewer jobs are being created and wage rises are modest.
“Add a weakening economy to the absence of inflation and the conventional answer is an interest rate cut. While few expect the Fed to cut rates this month, the likelihood of a July cut has risen sharply – and as a result the Greenback has swooned,” said David Lamb, head of dealing at Fexco Corporate Payments.
US jobs growth in shock May slowdown
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