Nonfarm payrolls increased by 155,000 jobs last month, while the unemployment rate was unchanged at near a 49-year low of 3.7 percent. Economists polled by Reuters had forecast payrolls increasing by 200,000 jobs in November.
Average hourly earnings rose six cents, or 0.2 percent in November after gaining 0.1 percent in October. That left the annual increase in wages at 3.1 percent, matching October's jump, which was the biggest gain since April 2009.
"This was slightly disappointing on the headline level, but wage growth coming in as expected keeps the Fed on track to raise rates in December," said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto.
"The overall effect has been a sell-off in the dollar, largely in a reaction to a lower expectation for rate hikes in 2019," he said.
An index that tracks the greenback versus the euro, yen, sterling and three other currencies was down 0.08 percent at 96.735.
"While the market remains volatile, this could be the catalyst that sparks a retreat in dollar strength as expectations for the Fed to continue its current rate of policy tightening fade," Sam Cooper, vice president of market risk solutions at Silicon Valley Bank, said in a note.
Falling U.S. yields, which have been chipping away at the yield differential advantage the greenback enjoyed earlier this year, have been another factor impeding the dollar's advance recently.
On a weekly basis, the dollar was down about 0.6 percent, set for its biggest drop in more than two months.
Sterling fell on Friday and was headed for a fourth consecutive week of losses as British Prime Minister Theresa May pressed ahead with plans for a parliamentary vote on her Brexit deal with the European Union, despite warnings it could topple her government.
The Canadian dollar strengthened against its U.S. counterpart as higher oil prices and data showing a record increase in domestic jobs bolstered expectations for further interest rate hikes from the Bank of Canada. (Reporting by Saqib Iqbal Ahmed; Editing by Dan Grebler)
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