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Dollar Weakens as Downbeat Job Data Weighs

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The greenback weakened against a basket of major currencies on Monday, as downbeat jobs data from Friday continued to weigh on the currency. The disappointing report crushed hopes of a U.S. rate hike in the near-term.

Trading volumes were lighter at the start of the week, as markets in the U.S. are closed for the Labor Day holiday.

The pound climbed 0.3% to 1.334 against the dollar, its highest level since early August. The euro was also higher, climbing 0.11% to 1.1167.

A report from the government on Friday showed that the economy added 151,000 jobs last month, missing expectations of a 180,000 increase. The unemployment rate held steady at 4.9%, but analysts were expecting the rate to dip down to 4.8%.

Average hourly earnings were up by 0.1% last month, which also missed expectations of a 0.2% rise.

The downbeat data extinguished hopes of a September rate hike. Fed officials indicated in recent weeks that the pace of rate hikes would be dependent on data.

The pound, meanwhile, gained strength after a positive report from Markit, which showed the services PMI in the U.K. rose from 47.4 in July to 52.9 in August. Analysts were expecting a reading of 50.

The greenback weakened against the yen, falling 0.61% to 103.27, after comments from BOJ’s Kuroda dampened hopes of further easing.

After six straight days of gains, the dollar stalled on Monday against the yen. Kuroda indicated that he was prepared to expand Japan’s massive stimulus program, but gave no clues as to when further easing would be implemented.

Elsewhere, the Australian and New Zealand dollars were higher against their U.S. counterpart, trading at 0.7601 and 0.7328 respectively.

Both currencies were supported by a positive report from the Australian Bureau of Labor Statistics, which showed that operating profits were up by 6.9% in the second quarter of the year. Analysts were only expecting a 2% increase.