LONDON- The U.S. dollar fell on Thursday after data showing the world's largest economy defying expectations for a second month in a row, creating jobs in June at a far faster pace than market forecasts.
The greenback was on track to post losses for a second straight week against a basket of major currencies.
Data showed that U.S. nonfarm payrolls increased by 4.8 million jobs in June, the most since the government started keeping records in 1939. Payrolls rebounded 2.699 million in May. Economists polled by Reuters had forecast payrolls increasing by 3 million jobs in June.
The unemployment rate, meanwhile, fell to 11.1% last month from 13.3% in May.
The report further diminished the dollar's appeal as a safe haven.
"Everything still seems to be heading in the right direction. Right now, expectations are pretty high that the economy is rebounding back," said Edward Moya, senior market strategist at OANDA in New York.
In midmorning trade, the dollar index slid 0.1% to 97.064, as the euro rose 0.1% versus the greenback to $1.1262 .
Traders are focused on whether the euro can close above $1.13 and OANDA's Moya said it could happen.
"This is going to support the belief that a massive weakening in the U.S. dollar is upon us because there's still optimism that risky assets are going to shine because the Federal Reserve is going to remain very accommodative," Moya said.
Despite the dollar's recent spell of weakness, the greenback is still up 2.5% from the 2020 low of 94.6 in the dollar index hit in early March. A Reuters poll predicts more weakness for the greenback over the next 12 months due to weak global demand.
The dollar, however, gained 0.1% against the yen to 107.59 yen.
The U.S. currency had been buffeted earlier in the session by news that a COVID-19 vaccine developed by German biotech firm BioNTech and U.S. pharmaceutical giant Pfizer had shown potential in early-stage human trials.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Andrea Ricci and Jonathan Oatis) ((firstname.lastname@example.org; 646-301-4124; Reuters Messaging: rm://email@example.com))