The dollar index (DXY00) dropped to a 7-week low today and is down by -0.34%. The dollar tumbled today on the US July payroll report that showed an unexpected decline in nonfarm payrolls and a smaller-than-expected increase in average hourly earnings, dovish factors for Fed policy. Also, today’s rally in stocks has curbed liquidity demand for the dollar. The payroll report cut the chances of a Fed rate hike at next month’s FOMC meeting to 44% from 58% before the report.
US July nonfarm payrolls unexpectedly fell by -23,000, weaker than expectations of +80,000 and the first decline in 5 months. June payrolls were revised downward to show a +20,000 increase from the previously reported +57,000. The July unemployment rate unexpectedly fell -0.1 to a 13-month low of 4.1%, showing a stronger labor market than expectations of no change at 4.2%.
