Downbeat data sends dollar lower Friday; No threat to September rate hike, analysts say

The yen slipped lower against the U.S. dollar on Friday, as sentiment on the greenback remained vulnerable after Thursday's downbeat U.S. data and as trading volumes were expected to remain thin with U.S. markets closed for the Independence Day Holiday.

USD/JPY was last at 122.90 after hitting 122.81 during European afternoon trade, the pair's lowest since Wednesday.

EUR/USD was up 0.08% to trade at 1.1088.

A day earlier, the greenback was hurt by a series of disappointing data which spurred uncertainty over the timing of the Fed rate hike.

On Thursday the U.S. Commerce Department reported that factory orders dropped 1.0% in May, well below the expectations for a 0.5% decline.

The Labor Department reported that the economy added 223,000 jobs in June, compared to expectations for jobs growth of 230,000. However, the unemployment rate declined to 5.3% in May, from 5.5% in June.

The number of individuals filing for initial jobless benefits in the week ending June 27 increased by 10,000 to 281,000, compared to expectations for a 1,000 fall.

Wage growth - an important inflation measure - was unchanged last with average earnings remaining at $24.95 an hour. Economist were expecting to wage expand by 0.2% for the month. According to the report, annual wage growth has grown by 2%.

The average hours worked also remained unchanged at 34.5 hours. The work week has remained unchanged for four consecutive months, the report said.

“The lack of a sustained acceleration in wage growth could prompt the Fed to keep pushing back the timing of the first rate hike. But with other measures suggesting that wage growth has risen and the unemployment rate on a sustained downward trend, a September rate hike remains very much in play,” said Paul Dales, senior U.S. economist at Capital Economics.