The US dollar headed for its biggest weekly decline in nearly three months on Friday after weaker-than-expected US jobs data reduced expectations of another Federal Reserve interest rate hike. Khamenei Funeral Iran begins week-long farewell as world leaders gather in Tehran The dollar weakened across major currencies during early Asian trading. Meanwhile, the euro hovered near a two-week high at $1.1442, while the British pound traded at $1.3361 and remained on course for its strongest weekly gain in almost three months. Additionally, the Australian dollar climbed to $0.6935 and looked set to end a four-week losing streak. The New Zealand dollar also gained 1.2% for the week to trade at $0.5702. The US Dollar Index, which measures the greenback against a basket of major currencies, slipped 0.2% to 100.77. As a result, it was down 0.58% for the week, marking its largest weekly decline since early April. The move followed a weaker US labour market report. Nonfarm payrolls increased by just 57,000 in June, well below forecasts of 110,000. Furthermore, the labour force participation rate fell to 61.5%, its lowest level in more than five years. Consequently, traders reduced expectations of a near-term Federal Reserve rate increase. Markets now price a 52% chance of a September rate hike, down from 64% a day earlier. US Treasury yields also eased after recent gains. In particular, two-year Treasury yields fell by four basis points, ending a three-day rally. An FX strategist at OCBC said the latest jobs figures eased concerns about an overheating labour market and reduced pressure for more aggressive monetary tightening. However, the strategist added that the dollar could remain supported if expectations for higher US interest rates persist. Yen rebounds as intervention concerns remain Meanwhile, the Japanese yen strengthened to 161.01 per dollar after gaining nearly 1% in the previous session. Investors also remained alert for possible intervention by Japanese authorities as officials continued efforts to discourage speculation against the currency. In addition, a government economic adviser said the Bank of Japan should continue raising interest rates gradually to address excessive weakness in the yen. Analysts said future moves in the dollar and yen would largely depend on upcoming US economic data and developments in Japan’s bond market. Post navigation Oil Prices Crude falls as US-Iran talks ease supply concerns
