US Jobs Disappoint, Greenback Loses Steam!
The US dollar index held below 101 in trading on Friday (July 3rd), after weakening sharply in the previous session. Pressure on the greenback arose as weaker-than-expected US employment data prompted market participants to cut expectations for a Federal Reserve interest rate hike this year.
The US economy added only 57,000 jobs in June, the lowest increase in four months and well below market expectations of 110,000. Meanwhile, the unemployment rate stood at 4.2%. This data follows a previous report showing that private sector job growth was also lower than expected.
Fed funds futures now estimate a 50% chance of a September interest rate hike, down from 67% before the latest jobs report was released. Fed Chairman Kevin Warsh also said this week that inflation expectations are starting to ease, although the central bank remains committed to maintaining price stability.
On a weekly basis, the US dollar index is on track to weaken, potentially ending its two-week rally. Going forward, the dollar's direction will still depend heavily on subsequent economic data and how the market interprets the Fed's interest rate policy. (asd)
Source: Newsmaker.id
