LONDON, Sept 2 (Reuters) - The dollar fell and stocks rose after U.S. jobs growth was weaker than expected in August, slashing prospects of a rate hike by the U.S. Federal Reserve this month.
The dollar dropped against the yen and a basket of currencies after nonfarm payrolls rose by 151,000 jobs last month, below consensus expectations of 180,000. The unemployment rate did not fall, contrary to expectations, and was unchanged at 4.9 percent. dollar dropped to 102.88 yen JPY= , down 0.4 percent, having been up slightly before the release. The dollar was down 0.5 percent against a basket of six major currencies .DXY , having been flat earlier.
Stock markets turned higher. U.S. S&P E-mini futures rose 0.3 percent, having been flat. The STOXX Europe 600 .STOXX extended gains to 0.7 percent.
Analysts said that the jobs report made a rate hike in September much less likely, despite more hawkish noises from Fed officials in the last week.
U.S. short-term interest rate futures rose, indicating trader expectations that the Federal Reserve could soon lift interest rates had been reduced. non-farm figures may pour cold water on the prospect of a rate rise later this month, despite the Fed's upbeat assessment of the economy in August," said Nancy Curtin, Chief Investment Officer of Close Brothers Asset Management.
U.S. treasury yields fell. Ten-year yields US10YT=RR dropped to 1.5579 percent.
Commodities including oil and copper, priced in dollars, rose.