Dollar Weakens as US Economy Loses 23,000 Jobs in July

The US dollar weakened at the end of the trading week after investors adjusted their expectations for Federal Reserve policy following the July jobs report.

Last month, the US economy lost 23,000 jobs, which was a weaker-than-expected result. Economists had forecasted a gain of about 80,000 jobs, and the unemployment rate dipped to 4.1%, from 4.2%, coming in below the consensus forecast.

The disappointing jobs report reignited fears that the labor market is beginning to slow down after four months of solid employment gains. As a result, traders have pared their bets that the US central bank will raise interest rates at next month's policy meeting. Investors now expect a 60% chance the Fed will leave the benchmark federal funds rate in the current target range of 3.5% and 3.75%,

Markets are penciling in a more dovish position at the Eccles Building, sending US Treasury yields lower and impacting the buck.