Dollar slips after US job growth slows in June

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The dollar fell on Friday after data showed job gains were less than expected in June, even as strong wage growth pointed to a still resilient labor market that likely ensures the Federal Reserve will resume hiking interest rates later this month.

in June, the Labor Department said in an employment report that also showed 110,000 fewer jobs were created in April and May than earlier reported.

"The Fed is being hawkish and that prevents the dollar from depreciating too much. But the ECB is just as hawkish, if not somewhat more so," said Thierry Wizman, Macquarie's global FX & currencies strategist in New York. Strong U.S. economic data on Thursday pushed short-dated Treasury yields to their highest since 2007, reflecting the view that the Fed is likely to raise rates by 25 basis points when it concludes a two-day policy meeting on July 26.Earlier, the Japanese labor ministry reported regular wages posted their largest annual increase in May since early 1995, reinforcing the view that the Bank of Japan will have to modify its ultra-loose monetary policy sooner rather than later.

Adding a tailwind to the rally in the yen was some position-squaring among speculators, who have built up sizeable bearish positions, MUFG's Hardman said.Weekly data from the U.S. regulator shows speculators hold a short position in the yen worth $9.793 billion, the largest since May 2022, having almost doubled in size in the last three months alone.

 

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