The U.S. dollar index fell to a two-week low today, down 0.68%, following weaker-than-expected June payroll data. Nonfarm payrolls increased by 57,000, significantly below the anticipated 113,000. Meanwhile, the unemployment rate unexpectedly fell by 0.1% to 4.2%, a one-year low, indicating a stronger labor market than anticipated.
Crude oil prices also pressured the dollar, with WTI dropping to a 4.25-month low. In contrast, initial unemployment claims dipped by 1,000 to 215,000, and May factory orders fell 1.3%, less than the forecasted 2.0% decline. The swaps market now reflects only a 20% probability of a rate hike at the upcoming FOMC meeting on July 28-29.
In international markets, the euro reached a 1.5-week high, supported by a decline in U.S. payrolls. Italy’s unemployment rate fell to a record low of 5.0%. Concurrently, USD/JPY decreased by 0.97%, as forecasts for potential intervention by Japanese authorities to strengthen the yen increased.
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