The US dollar index (DXY) fell by 0.95% on Friday, retreating from a two-month high after the July payroll report showed slower job growth, with nonfarm payrolls rising by 73,000, below expectations of 104,000. The unemployment rate increased by 0.1% to 4.2%. Following the release of weaker-than-expected labor data and a significant contraction in the July ISM manufacturing index, the likelihood of a Federal Reserve rate cut at the September meeting rose to 84% from 40%.
In the Eurozone, the July Consumer Price Index (CPI) increased by 2.0% year-on-year, surpassing expectations of 1.9%, while the core CPI met expectations at 2.3%. The euro recovered from a 1.5-month low, rallying by 1.11% against the dollar, supported by this CPI data.
The Japanese yen strengthened, rising sharply by 2.00% against the dollar as concerns about a weak yen were voiced by Japan’s Finance Minister. Additionally, gold prices increased, with December contracts closing up 1.53% amid rising safe-haven demand due to geopolitical tensions and US economic uncertainties.
