Dollar Loses Further Ground On Weak Economic Data

(RTTNews) - The U.S. dollar fell sharply and hit a near 5-month low on Friday, as data showing a much smaller than addition in U.S. non-farm payroll employment in the month of July, and an uptick in unemployment, as well as recent weak data on manufacturing activity raised fears the economy could fall into a recession.

Data from the Labor Department showed that non-farm payroll employment climbed by 114,000 jobs in July after jumping by a downwardly revised 179,000 jobs in June.

Economists had expected employment to rise by 175,000 jobs compared to the surge of 206,000 jobs originally reported for the previous month.

The unemployment rate rose to 4.3% in July from 4.1% in June. Economists had expected the unemployment rate to remain unchanged.

Following the data, investors are pricing in a 74.5% chance of a 50 basis point cut at the next policy meeting in September.

A report released by the Commerce Department said factory orders plunged by 3.3% in June after falling by 0.5% in May. Economists had expected factory orders to tumble by 2.9%.

The sharp decline by factory orders came as orders for durable goods plummeted by 6.7% amid a 29.6% nosedive by orders for transportation equipment. Orders for non-durable goods edged down by 0.1%.

The dollar index dropped to 103.13 on weak data, and continued to struggle right through the day's session. The index was last seen at 103.20, down nearly 1.2% from the previous close.

Against the Euro, the dollar weakened to 1.0911, losing more than 1%. The dollar fell to 1.2807 against Pound Sterling, easing from 1.2740.

Against the Japanese currency, the dollar dropped to 146.58 yen a unit. The dollar eased to 0.6520 against the Aussie.

The Swiss franc strengthened to 0.8585 a unit of the greenback, gaining from 0.8731 on Thursday. Against the Loonie, the dollar was down slightly at C$1.3869.