Key facts
- The U.S. dollar index fell to a two-week low as bets on a Federal Reserve rate hike diminished.
- The Japanese yen hovered near a 40-year low, raising concerns about potential intervention.
- The euro and sterling saw gains against the dollar.
- June's U.S. payrolls report showed slower job growth, reducing expectations for further Fed tightening.
- Minutes from the Fed's June meeting are anticipated for insights into the rate outlook.
The U.S. dollar traded near a two-week low as market expectations for further Federal Reserve rate hikes diminished following a slowdown in job growth. The dollar index was at 100.86, while the euro and sterling saw gains against the greenback.
The Japanese yen remained a focal point, hovering near a 40-year low of 162 per dollar. Traders are on edge due to the possibility of official intervention, although analysts suggest such actions may only provide temporary support without fundamental shifts. The yen briefly surged on Thursday, indicating market nervousness.
The U.S. dollar experienced its largest weekly decline since April after the June payrolls report indicated a significant slowdown in job creation. Investors are now pricing in roughly 29 basis points worth of Federal Reserve rate hikes by December.
Investor focus this week is on the minutes from the Fed's June meeting for further clues on the interest rate outlook. Strategists noted that the minutes might offer less insight than usual, referencing former Fed Chair Kevin Warsh's views on excessive guidance.