Dollar Weakens as Surprising Job Losses Cloud Fed Outlook

The US dollar weakened against major currencies on Friday after a surprise decline in employment numbers sparked concerns about the economy and clouded the Federal Reserve's interest-rate outlook.

The Labor Department reported that the US economy shed 23,000 jobs in July, compared to an expected increase of 80,000, causing the dollar to fall against the yen and euro.

The unemployment rate declined to 4.1%, but the labor-force participation rate fell to its lowest level in nearly five-and-a-half years at 61.4%.

Thierry Wizman, a global FX and rates strategist at Macquarie Group, attributed the dollar's drop to the unexpected employment report, saying 'The big drop that we saw this morning is almost wholly related to the US employment report for July because I think no one really expected non-farm payrolls to be negative or that there would be a big downward revision in the June numbers.'

The dollar index fell 0.2% to 99.61, while the euro gained 0.31% against the dollar.