FX.co ★ DXY Falls Toward 2-Month Low After Jobs Report

The dollar index fell 0.5% to 99.4 on Friday, hovering near a two-month low, after weaker-than-expected US employment data dampened expectations of imminent interest rate hikes by the Federal Reserve. Nonfarm payrolls unexpectedly declined by 23,000 in July, and significant downward revisions to the previous two months underscored signs of a softening labor market. The unemployment rate inched down to 4.1%, but labor force participation continued to slip. Taken together, the figures intensified concerns that employment conditions are deteriorating amid persistent inflationary pressures and uncertainty related to the Iran conflict, while simultaneously raising the odds that the Fed will delay further policy tightening. In response, investors scaled back wagers on a rate increase in September. Separately, President Donald Trump said talks between Iran and Oman over the Strait of Hormuz were “moving along,” though no agreement has yet been reached.