June payrolls rose just 57K, far below the 110K estimate, prompting traders to cut Fed rate hike bets for September.
The US Dollar Index fell to a two-week low near 100.56 after June nonfarm payrolls grew by only 57K, missing the 110K consensus. The report also revised May’s gain down to 129K from 172K, further weighing on the Greenback.
Prior to the release, markets had priced in a 63% chance of a September Fed rate hike. That probability dropped to 53% following the data. The unemployment rate unexpectedly dipped to 4.2%, while wage growth met expectations at 0.3% month-over-month.
The dollar’s decline was amplified by a sharp rebound in the Japanese Yen, with traders suspecting intervention after USD/JPY hit a 40-year high earlier this week. Japan’s Finance Ministry declined to comment on the move.