The dollar fell across the board following the report. It weakened 0.99% to 147.03 against the Japanese yen, but was still on track for the second straight week of gains. The greenback dropped 0.99% to 0.7998 against the Swiss franc and was poised for the fourth consecutive week of losses against the currency.
“The data is giving evidence of what was feared, which is that what companies have experienced throughout the year because of changes in trading policy has added costs when it comes to tariffs,” said Juan Perez, director of trading at Monex USA in Washington. “These costs can only be absorbed for so long and what is being manifested is that companies are struggling with hiring.”
The euro was up 0.79% at $1.174425 and was set to notch a weekly gain against the dollar. The dollar index fell 0.70% to 97.54 and was set to shed 0.23% this week.
U.S. Treasury yields fell. The rate-sensitive 2-year note yield fell 11.2 basis points to 3.48%. The yield on benchmark U.S. 10-year notes fell 10.4 basis points to 4.072%.
Wall Street’s main indexes, including the S&P 500, Nasdaq and the Dow, were all trading higher. Traders are now pricing a 12% chance of a 50-basis point cut at the Fed’s next meeting later this month, while the probability of a 25-basis point cut is at nearly 88%, according to the CME’s FedWatch tool. “It’s definitely not a good story for the U.S. dollar and it’s not a good story for the United States because what today truly establishes is that we are experiencing very serious stagflation,” Perez added. The pound rose versus a weaker dollar after Friday’s news that British Deputy Prime Minister Angela Rayner resigned after admitting to underpaying property tax on a new home, in a fresh blow for her boss, Prime Minister Keir Starmer.
It strengthened 0.78% to $1.35420 and was on track to gain 0.3% for the week.
Gold hit a fresh record high of $3,595.30 as the dollar weakened. Spot gold rose 1.37% to $3,593.91 an ounce.
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