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Dollar holds near two-month low after soft US jobs report
Markets cut the probability of a September Fed move to about 48%, with investors turning to Wednesday’s core CPI for confirmation.
The U.S. dollar steadied near a near two-month low on Monday after Friday’s softer jobs data, as traders looked ahead to this week’s inflation figures for clues on the Federal Reserve’s rate path, according to Reuters. Friday’s report showed the U.S. economy unexpectedly shed jobs in July and revised down job gains for the prior two months, weighing on expectations for a September rate hike.
Futures pricing scaled back the odds of a September move to around 48% from 67% a week earlier, Reuters reported. Analysts cited the labor market data as negative for the dollar, with a consensus calling for core CPI to rise 0.2% month-on-month in July and the annual rate to ease to 2.5% from 2.6% in June.
The euro was little changed at $1.1555, hovering near its strongest level since mid-June, while sterling held near $1.3501, just below a three-and-a-half-week peak from Friday, Reuters said. The yen weakened 0.6% to 158.89 per dollar and was set for its largest daily drop versus the greenback in almost five months.
Speculators trimmed bearish bets on the Japanese yen, with Reuters citing CFTC data showing the net short position in the yen fell by $8.865 billion to $3.604 billion in the week to August 4. Reuters also noted investors are watching efforts to reopen the Strait of Hormuz, while oil rose, with Brent crude futures up more than 1.5% to about $85 per barrel amid uncertainty.
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