Dollar index stays pressured near one-week low

The dollar index stays pressured around a one-week low on Monday morning in Asia following a close to 1% fall on Friday. The greenback struggles amid weak labour market data that could lead the Federal Reserve to rate cuts this year. US nonfarm payrolls rose by 73,000 in July, well below expectations of 110,000. The unemployment rate rose slightly to 4.2% in July from 4.1% in June. The labor force participation rate in the US eased to 62.2% in July. The ISM Manufacturing PMI fell to 48 in July from 49 in June, while construction spending in the US fell by 0.4% in June.

Earlier this week, the Fed had left the borrowing rates unchanged at 4.25% to 4.50%. The Fed Chair too, in his speech, did not give any signals of a rate cut in September. However, currently, the market is betting that the Fed may finally have to act to cut interest rates in order to support a weak jobs market.

The yield on US 10-year Treasury rose to around 4.25% on Monday, while the dollar index that measures the greenback against a basket of currencies is quoting at 98.55. Meanwhile, caution prevails as Trump reportedly fired Bureau of Labor Statistics (BLS) Commissioner Erike McEntarfer, after Nonfarm Payrolls (NFP) report for July, which showed a slowdown in the hiring trend.

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