The dollar index hovered below 101 on Monday after recording weekly losses, as weaker-than-expected US employment data and softer oil prices prompted traders to scale back expectations for further Federal Reserve interest rate increases.
Data released last week showed that US nonfarm payrolls rose by only 57,000 in June, the smallest increase in four months and well below the consensus forecast of 110,000. The surprise downside in job growth led markets to trim the probability of a rate hike in September.
At the same time, oil prices inched lower, pressured by improving energy shipments through the Strait of Hormuz and the prospect of higher OPEC+ production, both of which stoked worries about a potential supply glut. The pullback in crude has helped ease inflationary pressures that had previously reinforced expectations of additional Fed tightening.
Investors now turn their attention to the minutes of the Federal Reserve’s June policy meeting, due later this week, for further insight into the central bank’s policy outlook and the future path of interest rates.
