US dollar declines as rate-hike expectation dims

The US dollar fell against most of major currencies on Wednesday as recent economic fundamentals in the country and around the world dented market expectation for an interest-rate hike soon this year.

Total nonfarm payroll employment increased by 287,000 in June, beating market consensus of a 175,000 gain, but the unemployment rate rose to 4.9 per cent, the Labour Department reported on Friday, according to Xinhua.

Analysts pointed out that although the Federal Reserve will take encouragement from this vital data, they simply aren't in a position to consider a rate hike at the moment.

Fed policymakers decided in June that it was prudent to wait for more data and the Brexit vote result before raising rates, according to the minutes of the Fed's June policy meeting released last week.

Analysts said Britain's surprise vote to leave the European Union last month cast uncertainties over the global economic outlook and reduced investors' expectations for a rate-hike this year.

The dollar index, which tracks the greenback against six major peers, was down 0.25 per cent at 96.200 in late trading.

In late New York trading, the euro rose to $1.1110 from $1.1068 of the previous session, and the British pound lost to $1.3162 from $1.3261. The Australian dollar went down to $0.7614 from $0.7639.

The dollar bought 104.37 Japanese yen, lower than 104.88 yen of the previous session. The dollar slipped to 0.9828 Swiss francs from 0.9877 Swiss francs, and it slipped to 1.2966 Canadian dollars from 1.3012 Canadian dollars.

--IANS

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