Dollar Weakens as US Jobs Data Misses Expectations

The US dollar weakened on Friday after the latest nonfarm payrolls report came in lower than expected, prompting traders to increase bets on a Federal Reserve interest rate cut later this year.

The US Department of Labor reported that nonfarm payrolls rose by 175,000 in April, below the consensus estimate of 240,000. The unemployment rate ticked up to 3.9% from 3.8%, and average hourly earnings grew 0.2% month-over-month, missing forecasts of 0.3%.

CME Group's FedWatch tool shows that futures markets now imply a 70% probability of a rate cut by September, up from 60% before the data. The odds of a second cut by December also rose, with markets pricing in approximately 42 basis points of easing by year-end.