Forex
Dollar Index Drops Below 102.00 Amid Surprise Jobs Miss
US payrolls released last week showed an unexpected miss at just 29K jobs in September, compared to forecasts of 90K. The unemployment rate rose to 4.2%, while hourly pay grew by 3.0% over the year, slightly below the forecasted 3.2%. This has significantly altered traders' views on a potential interest rate hike on October 28, with some now seeing only about one-in-five chances of another increase.
The US two-year Treasury yield, which closely tracks Federal Reserve expectations, fell following the release. A lower yield means less extra interest for holding Dollars over Euros, making up 57.6% of the Dollar Index. Consequently, the Dollar itself dropped, with the Dollar Index falling below 102.00.