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Dollar Recovers From Early Losses

A softer-than-expected jobs report today increased the prospect of a more dovish Fed, which weakened the buck. Likely reasons behind the reaction include crowded long peso positions, the view that Banxico’s tolerance of peso strength has reached some kind of limit, and the reduction by half of the $4.8B in hedges that mature this month, Chris Turner and James Wilson at ING say in a note. 0857 ET – The dollar weakens as signs of easing growth in US labor markets emerge, reducing the prospect of another dollar-supporting interest rate increase by the Fed. August payrolls increased by 187,000, which was more than expected b y economists, but the expansion was offset by unemployment rate unexpectedly growing to 3.8% from 3.5% and a surprising slowdown in wage growth.


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