Dollar Drops as Weak US Jobs Data Fuels Fed Hike Expectations
The US dollar declined against major currencies like the yen and euro on Friday after the release of weak jobs data in July. The Labor Department reported a loss of 23,000 jobs, contradicting economists' expectations for an increase of 80,000 jobs.
The unemployment rate fell to 4.1%, while the labor participation rate dropped to a near five-and-a-half year low of 61.4%. As a result, the market's expectations for a Federal Reserve interest rate hike in September decreased, with a 56% chance that rates will remain steady.
Thierry Wizman, global FX and rates strategist at Macquarie Group, believes the market has shifted the Fed hike to October or December instead of September. The dollar index fell 0.44% to 99.50, while gold rose 2.55% to $4,347.29 an ounce.