The dollar index (DXY00) fell by -0.05% on Friday. A weaker-than-expected US Sep payroll report on Friday weighed on the dollar. Both non-farm payrolls and average hourly earnings rose less than expected, reducing the chance of a Fed rate hike later this month. Friday’s -1% decline in WTI crude oil prices lowered inflation expectations and could persuade the Fed to loosen monetary policy, a bearish factor for the dollar. The dollar was also pressured by the weaker-than-expected US Aug factory orders report.
However, the dollar recovered from its worst level on Friday after T-note yields erased an early decline and moved higher. Also, hawkish comments from Dallas Fed President Lorie Logan supported the dollar when she said the Fed may need to raise interest rates by at least another 50 bp to cool inflation.
