Dollar Takes Hit

The picture turned ugly for he U.S. dollar after the anemic jobs report today, falling against several currencies, a move that won't make Japanese officials, to name one, happy. To be sure, they'll be those who cite different reasons for the pathetic jobs report with the recent Verizon strike one of them.
                                
With Fed Chair Janet Yellen set to speak Monday for the last time before the next FOMC gathering investors will be scanning carefully her words looking for clues to see if a June hike is in the cards. The next hike, if and when there is one, will be the first of this year. China and the U.S. are already upset about trade sanctions and currencies differentials. A weaker dollar won't smooth things over there anytime soon.

The dollar index, which tracks the greenback against a basket of currencies, is down by 1.6% at 94.02 — its lowest level since mid-May.

The major currencies are all up against the US dollar. Here's the scoreboard as of 10:16 a.m. ET:

• The Japanese yen is stronger by 1.8% at 106.97 per dollar.
• The euro stronger by 1.7% against the dollar at 1.1341.
• The British pound is stronger by 0.8% against the dollar at 1.4543.
• The Australian dollar is stronger by 1.5% at 0.7334 per dollar.
• The Canadian dollar is stronger by 1.2% at 1.2948 per dollar.

Tellingly, three big "risk-off" trades stand out: the yen is stronger against the dollar, gold prices are up by 2.7%, and US Treasurys have rallied.

Gold rallied on the weaker dollar and the possibility of no rate hike soon that should push the dollar higher and Treasury prices usually react inversely to what interest rates do. There is more at stake here, however, as the Fed gets wedged into a higher possibility of doing the wrong thing at the right time. Jawboning can only carry them so far.  

Holding fast or raising rates will both be interpreted as doing something. Investors could decipher either one as a negative given the tight corner the Fed now finds itself sitting.