U.S. Dollar Slides After Weaker-Than-Expected Jobs Data Release

(RTTNews) - The U.S. Dollar value edged lower after analysts trimmed their expectations of any near-term interest rate hike by the U.S. Federal Reserve while the U.S. nonfarm payrolls data release today indicated a cooling labor market.

The U.S. Dollar Index, DXY, which measures the Greenback against a basket of other major currencies was last seen trading at 100.85, down by 0.55 (or 0.54%) today.

While against the Euro, USD was trading at 1.143, down by 0.49%, against the GBP, it was trading at 1.334, down by 0.54%.

Against the USD, the Japanese Yen was trading at 161.114, up by 0.90%; the Swiss Franc was trading at 0.803, up by 0.62%; and the Canadian Dollar was trading at 1.418, up by 0.22%.

Against one unit of Australian Dollar, USD was trading at 0.692, down by 0.41%.

The data released by the U.S Bureau of Statistics today revealed that the U.S. economy added 57,000 jobs in June, far below a downwardly revised 129,000 in May and forecasts of 110,000. This is the lowest job gain in four months, following three consecutive months of stronger-than-expected gains.

Last month, the nonfarm payrolls increased by 110,000 after rising 172,000 in May.

The labor force participation rate decreased by 0.30% to 61.50% in June, the lowest rate since March 2021 as 720,000 people left the labor force.

The unemployment rate dropped to 4.20% in June, down from 4.30% in May and below expectations. The number of unemployed fell by 213,000 to 7,090,000 while total employment declined by 507,000 to 162,260,000.

U.S. Department of Labor data revealed that the number of people claiming unemployment benefits fell by 1,000 from the previous week in the last full week of June, the lowest in five weeks, and below market expectations of 220,000.

However, yesterday while addressing a European Central Bank panel in Sintra, Portugal, the U.S. Federal Reserve Chair Kevin Warsh observed that he will stick with the U.S. Fed's 2.00% inflation target.

Currently, investors are betting on a 17.60% chance of a quarter-basis-point interest rate-hike in the upcoming Fed's meeting on July 28-29 while the bets on rates being held at the current level stand at 82.40%, according to CME Group's FedWatch Tool.

As the U.S. and Iran concluded their indirect technical talks in Doha, Qatari officials who mediated the negotiations reported positive progress on issues related to the U.S.-Iran Memorandum of Understanding signed on June 17.

The next round of discussions is slated to be held by next week.

With the reopening of the Strait of Hormuz following the MoU, tanker traffic has been increasing gradually, leading to a decline in crude oil prices and reducing oil-linked inflationary pressures.

However, losses in crude oil prices were limited with stark differences between the U.S. and Iran over the control and management of the Strait of Hormuz.

The U.S. administration has repeatedly assured that shipping across the strait will be free for all international ships after the final deal is made.

Iran warned that any U.S. interference in the strait will be met with a decisive and swift response.