US Dollar Declines amid Falling Treasury Yields, Disappointing Employment Data

The US dollar declined against its major peers today despite the risk-negative sentiment. Market analysts explained the drop by falling Treasury yields and disappointing employment data.
Thursday’s macroeconomic data disappointed market participants, with employment rising less than was expected while unemployment claims being above forecasts. Meanwhile, 10-year US Treasuries slumped 1.85%. As a result, bets for an interest rate hike from the Federal Reserve in December fell from an 80% chance to a 63% chance according to the CME FedWatch page. The probability of additional hike in March fell from almost 40% to a bit above 20%.
Now, traders wait for tomorrow’s release of nonfarm payrolls. Economists predicted a solid growth by 200,000, and any deviations from the forecast can have significant impact on the greenback. The unemployment rate and wage inflation will also be closely watched by market participants.
EUR/USD gained from 1.1344 to 1.1385 as of 19:00 GMT today. USD/JPY dropped from 113.19 to 112.58. USD/CHF declined from 0.9977 to 0.9924, touching the low of 0.9894 intraday.

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