The US Dollar Index (DXY), which tracks the buck’s value against a basket of six currencies, is down 0.36%m at 99.58 following a weaker-than-expected US jobs report.
The data has eased pressures on the Federal Reserve to hike rates, as inflation remains stubbornly above the Fed’s 2% goal
DXY falls after July payrolls contracted, pushing yields lower and shifting attention to next week’s CPI July Nonfarm Payrolls showed that the economy slashed 23K jobs from the workforce, below forecasts of 80K jobs. The figures for May and June were revised lower, with the former at 63K, down from 129K, and the latter at 20K, down from 57K. Although the report was negative, the Unemployment Rate ticked lower from 4.2% to 4.1%.
On the data, Richmond Fed Thomas Barkin said that the labor market is more low-hire, low-fire, and noted that corporate earnings “are quite strong.” Following the data, the DXY plunged from 99.90 to 99.48, while US Treasury yields, particularly the 10-year T-note yield, fell by 3.5 basis points to 4.637%. Fed expected to hold rates in September Money markets trimmed expectations for a rate hike in September. The odds of a hold, reversed from around 42% to nearly 70%, while the chances of a 25-basis-point increase eased from 58% to 30%, according to Prime Terminal data.