The dollar dipped against the euro and the yen on Monday after the latest U.S. employment report on Friday indicated that the Federal Reserve could afford to keep rates on hold for longer.
EUR/USD edged up to 1.1852, off the nine year trough of 1.1753 reached last Thursday.
The U.S. economy added 252,000 jobs in December the Labor Department said, more than the 240,000 forecast by economists. The unemployment rate ticked down to a six-and-a-half year low 5.6%.
But average earnings fell by 0.2% last month and were up by only 1.7% from a year earlier.
Weakness in earnings prompted investors to take profits in the dollar, as markets pushed back expectations for the first hike in U.S. interest rates to late-2015.
The euro remained under pressure amid speculation that the European Central Bank will embark on full blown quantitative easing as soon as its next meeting on January 22.
Over the weekend, the governor of the Italy’s central bank warned that the euro zone is at risk of further deflation and said the best way to combat that threat is through purchasing government bonds.
USD/JPY touched lows of 118.10 on Monday before steadying at 118.32, with markets in Japan closed for a holiday.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slid to 92.07, off the 12-year peaks of 92.76 scaled last week.
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