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Dollar falls after July jobs report revisions, gold jumps

July nonfarm payrolls fell 23K, with May and June revised down by a combined 103K and wage growth slowing, pushing the market to cut the odds of a September Fed hike to about 42%.

Reported · Written up by our desk · Major Pairs

A surprise shift in the US labor market sent the dollar sharply lower and lifted precious metals, according to Action Forex. July nonfarm payrolls fell 23K versus expectations for an 85K gain, while average hourly earnings slowed to 0.1% month over month from 0.3%.

The report also included large downward employment revisions, with May payroll growth revised down from 129K to 63K and June revised down from 57K to 20K, removing a combined 103K from previously reported gains. While the unemployment rate dipped from 4.2% to 4.1%, Action Forex noted participation also fell from 61.5% to 61.4%, softening the signal.

Markets moved quickly to pare back the case for additional Fed tightening, cutting the probability of a September rate hike to around 42%. Several Fed officials have argued for a gradual or more flexible approach, but the combination of negative payroll growth, sizable revisions, and weaker wage momentum raised the hurdle for further hikes.

The dollar reaction was broad across major pairs, Action Forex said. EUR/USD and AUD/USD rose to fresh weekly highs, while USD/JPY reversed much of its prior rebound and headed back toward 155 after last week’s US-Japan intervention, while USD/CAD faced pressure from both weaker US employment and a stronger Canadian jobs print.

Latest closeGold $4,292.00 ▲1.1%|EUR/USD 1.152 ▼0.3%|USD/JPY 158.52 ▲0.6%

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