Dollar Dives on Weaker Payroll Report as Yen Surges
The US dollar retreated to a 7-week low on Friday after the release of the July payroll report, which showed an unexpected decline in nonfarm payrolls and a smaller-than-expected increase in average hourly earnings.
The report also reduced the chances of a Fed rate hike at next month's FOMC meeting to 44% from 58% before the report. The dollar tumbled after the US July payroll report showed an unexpected decline in nonfarm payrolls by -23,000, weaker than expectations of +80,000.
The yen jumped on Friday as the dollar retreated, with lower T-note yields and signs that the US would continue joint intervention in the forex market in support of the yen also contributing to its rise. The BOJ's current policy rate of 1.00% is well below the Fed's federal funds rate target of 3.50%-3.75%, which continues to weigh on the yen.