The dollar index (DXY00) Friday fell by -1.17% and tumbled to a 4-1/2 month low. The dollar sank Friday on the weaker-than-expected US Jul payroll report that showed the Jul payrolls rose less than expected and the Jul unemployment rate rose to a 2-3/4 year high. Also, wage pressures eased after Jul average hourly earnings grew at the slowest annual pace in 3 years. The Fed-friendly payroll report boosted the chances to 100% for the Fed to cut rates by 25 bp at the September FOMC meeting and by 71% for the Fed to cut interest rates by 50 bp, a bearish development for the dollar. The dollar extended its losses Friday after US Jun factory orders posted their biggest decline in 4 years.
US Jul nonfarm payrolls rose +114,000, weaker than expectations of +175,000, and Jun nonfarm payrolls were revised lower to +179,000 from the previously reported +206,000. The Jul unemployment rate unexpectedly rose +0.2 to a 2-3/4 year high of 4.3%, showing a weaker labor market than expectations of 4.1%.
