The markets are reacting to a mixed U.S. jobs report Friday morning. Despite the number of new non-farm jobs added in June beating expectations, the higher unemployment rate for June has the dollar falling against its peers.

Mixed labor report dips the dollar

The U.S. jobs report released Friday morning has the dollar slipping against the euro, pound and Japanese yen.

The number of nonfarm payrolls added in June beat estimates of 195,000, coming out at 213,000. The number is still a decline from the 244,000 jobs added in May.

However, that’s where the good news ends. Average hourly earnings growth remained steady at 2.7%, missing expectations of 2.8%. And the unemployment rate ticked up to 4.0% compared to 3.8%.

The unemployment rate increase was the first in almost a year. The decline in wage growth and unemployment indicates there’s more room for the labor market to grow.

The EUR/USD pair jumped from 1.171 to 1.176 immediately on the report and then settled around 1.175. Cable climbed up from 1.322 to 1.326. USD/JPY fell to 110.4.

First big battle of the trade war

The U.S. started its promised duties on $34 billion worth of Chinese goods at 12:01 a.m. EST.

There is another $16 billion in goods awaiting tariffs in the next couple weeks and President Trump suggested the total value could reach $550 billion. However, that exceeds the value of all U.S. imports from China in 2017.

China has said its retaliatory tariffs are in effect.

Currency markets had little immediate reaction to the official imposition of tariffs. The up-and-down sentiment has swayed the pair in the past couple weeks.

A game of Chequers

U.K. Prime Minister Theresa May is meeting with her cabinet Friday at her Chequers country estate, laying out a customs plan for Brexit.

Thursday, the GBP/USD pair fell to 1.322 on reports that German Chancellor Angela Merkel was not on board with the customs plan.

We’ll see if May’s cabinet can come to some sort of consensus as to what Brexit will look like with the deadline nine months away.

The GBP/USD pair is trading up around 1.326 on worse-than-expected U.S. jobs report.