The dollar index (DXY00) today is sharply lower by -0.75% on the weak US unemployment report and the increased expectations for Fed easing through year-end. The dollar was also undercut by the sharp -8 bp decline in the 10-year T-note yield, which undercut the dollar’s interest rate differentials. The 2-year T-note yield fell by an even larger -12 bp to 3.47%.
Today’s Aug payroll report of +22,000 was weaker than the consensus of +75,000. Over the past three months, payrolls have shown an average monthly rise of only +29,000. July payrolls were revised slightly higher to +79,000 from +73,000, but June was revised lower to a decline of -13,000. Aug private payrolls rose by only +38,000 while manufacturing payrolls fell by -12,000. The Aug unemployment rate rose by +0.1 point to a 3.75-year high of 4.3%, up from +4.2% in July, which was in line with market expectations.
