The dollar looks set to post its largest weekly drop in nearly three months
after a soft US June employment report trimmed market odds of a Fed rate hike.
Traders cut the probability of a September increase to 52% from 64% a day
earlier. US Treasury yields pulled back from earlier highs and the 2-yr yield
ended a three-day advance. The cooler jobs print gave the weak yen some relief.
OCBC Bank FX strategist Sim Moh Siong said the data is marginally dovish and
eases concerns about an overheating labor market and the need for more
aggressive tightening, but added that as long as Fed tightening expectations
persist the dollar’s overall outlook remains constructive, especially versus
low-yielding currencies.
