Dollar falls after July job losses weaken rate-hike expectations

The dollar fell against major currencies Sunday after U.S. employment unexpectedly declined in July, raising concerns about the economy and reducing expectations for a Federal Reserve interest rate increase.

The Labor Department said the U.S. economy lost 23,000 jobs in July, compared with economists’ expectations for an 80,000-job gain in a Reuters poll. The unemployment rate fell to 4.1% as the labor participation rate dropped to 61.4%, near a five-and-a-half-year low.

The dollar index fell 0.44% to 99.50 and was on track for a second weekly decline. The euro rose 0.39% to $1.1568, while the dollar fell 0.57% to 157.56 yen.

Treasury yields also moved lower after the jobs report. Markets put a 56% chance on the Fed holding rates steady in September, up from 45% a day earlier, according to CME’s FedWatch tool.

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