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Dismal NFP number eliminates June rate hike hopes

The dollar hovered near its lowest in over three weeks early on Monday after an overly disappointing US employment report left little to interpretation and prompted market participants to rule out the chance of an interest rate hike in the US this month.

The Dollar index stood at 94.112, having dropped to its lowest since May 12th by 93.855 on Friday. It tumbled 1.6 percent on Friday, posting its second biggest one-day drop this year.

USD/JPY slipped to a one-month low of 106.35 while EUR/USD soared to its highest in three weeks at 1.1375 and has since drifted back to 1.1350.

On Friday, the US Labor Department published dismal employment figures with the headline non-farm payroll number printed at 38’000 against expectations for 164’000 jobs added. The NFP number marked the lowest increase in over 5-1/2 years. Despite the jobless rate dropping to 4.7 percent, versus expectations for 4.9 percent, average hourly earnings rose 0.2 percent from the previous month, down from the previous 0.3 percent increase.

Commodity currencies benefited tremendously from the sour jobs data. The Aussie rose more than 2 percent and USD/CAD dropped back below 1.3000 handle. Spot gold clawed back towards the $1,250 mark, and is now trading around $1,242 per ounce.

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