Dollar slips near seven-month lows after jobs data

The US dollar on Monday neared its lowest in seven months against other major currencies, after data last week suggested the Federal Reserve could slow the pace of its rate hikes, while China re-opening its borders boosted riskier currencies.

China's offshore yuan neared its highest in five months against the US dollar, while the Australian and New Zealand dollars - generally regarded as more liquid proxies for the Chinese currency - rallied sharply.

The dollar posted its biggest quarterly loss in 12 years in the last three months of 2022, driven mainly by investors' belief that the Fed won't raise rates beyond 5%, from its current range of 4.25%-4.50%, as inflation and growth cool.

Two separate reports on Friday painted a picture of an economy that is growing and adding jobs, but where overall activity is tilting into recession territory, prompting traders to sell the dollar against a range of currencies.

Friday's monthly employment report showed an increase in the number of workers on non-farm payrolls, and a slowing in wage growth - welcome news for the US central bank.

A separate report from the Institute for Supply Management showed activity in the service sector contracted for the first time in 2-1/2 years in December. The ISM's non-manufacturing PMI came in at 49.6, its weakest since 2009, excluding the collapse during the pandemic in 2020.