FX.co ★ Dollar Stays Under Pressure

The dollar index stayed below 101 on Tuesday, remaining under pressure as investors pared back expectations for further Federal Reserve rate hikes after a weaker-than-forecast US jobs report. Data released last week showed a sharp slowdown in June job growth, along with downward revisions to payroll figures for the prior two months. Markets are now pricing in roughly a 50% probability of a Fed rate increase in September, down from about two-thirds before the latest employment data. Investors are awaiting the minutes of the Fed’s June policy meeting for additional guidance on the interest rate outlook, while also watching US trade deficit figures due later in the day. The dollar weakened against most major currencies but held near 40-year highs against the Japanese yen.