The U.S. dollar regained ground on Monday after an initial sell-off on Friday in response to weaker-than-expected U.S. jobs data for June. While the 209,000 rise in nonfarm payrolls missed estimates, strong wage growth pointed to a still-tight labor market.
The dollar initially fell nearly 1% against a basket of currencies on Friday after the jobs report but then rebounded in Asian trade, particularly rising against the Japanese yen. The USD/JPY pair is sensitive to U.S. Treasury yields, which had eased on Friday but then rose again on Monday.
Despite the dollar's initial drop, analysts said the strong wage growth in the report suggested the Fed still has work to do and that the Dollar remains underpinned. They questioned if the initial slide in the greenback would be sustained.
The Euro and British Pound also slipped against the Dollar on Monday, giving up some of their gains from Friday. Investors are now awaiting U.S. inflation data due on Wednesday for further clues on the Fed's rate hike path.
In other currencies, weak Chinese data weighing on the Yuan and its proxies. Factory gate prices fell the most in over 7 years in June while consumer inflation eased, fueling hopes for more stimulus from Beijing. This dragged down the Australian and New Zealand Dollars, which are used as liquid proxies for the Yuan.
