Dollar Sees Weekly Gain as Traders React to Surprise Jobs Drop
The US dollar is on track for its first weekly gain in three weeks as traders eye ongoing Iran talks and Friday's US jobs data, which showed an unexpected decline in employment.
Data from the Labor Department revealed a loss of 23,000 jobs in July, falling short of economists' expectations for an increase of 80,000. This unexpected drop led to concerns about the economy and its potential impact on Federal Reserve interest rate decisions.
The dollar weakened against the yen, shedding gains made after a historic intervention between Japanese and US authorities last week, which had pushed it to a 13-week low. The yen steadied Tuesday after suspected Tokyo intervention, while safe-haven demand amid the Middle East war caused the dollar to firm.
Thierry Wizman, global FX and rates strategist at Macquarie Group, attributed the big drop in the dollar's value to the US employment report for July. He said that 'the market has shifted the Fed hike into October or December instead of September' due to the weak labor market data.