• The index extends the drop to 3-day lows near 104.60.
• US yields drop further in the wake of the US jobs report.
• The US economy created more jobs than initially estimated in February.

The greenback now loses further ground and breaks below the key 105.00 barrier when tracked by the USD Index (DXY) on Friday.

USD Index weakens post Payrolls

The selling pressure picks up pace around the greenback as market participants continue to digest the mixed US jobs report for the month of February.

On the latter, the US economy created 311K jobs, once again surpassing consensus for a gain of 205K jobs. Furthermore, the December print was revised to 504K (from 517K).

Somehow removing optimism from the report, the Unemployment Rate increased to 3.6% and the Average Hourly Earnings – a proxy for inflation via wages – rose 0.2% MoM and 4.6% from a year earlier. Additionally, the Participation Rate increased marginally to 62.5% (from 62.4).

Following the release of the February Payrolls, investors now see a 25 bps rate hike as once again the most likely scenario at the Fed’s gathering on March 22, which also weighs on the mood surrounding the buck and props up the corrective decline.