The U.S. dollar continued to slide on Monday after disappointing jobs data raised hopes that the Federal Reserve may cut interest rates as early as next month.
According to new data, the U.S. economy added only 73,000 jobs in July — much lower than expected. The unemployment rate also rose to 4.2%, and previous months’ numbers were revised lower. This sparked concerns that the U.S. labor market is slowing down.
Markets now believe there is a 90% chance the Fed will cut rates in September. Lower interest rates usually weaken the dollar, as they make U.S. assets less attractive to investors.
Bond Yields Drop, Trump Responds Strongly
U.S. bond yields also fell. The 2-year Treasury yield hit a three-month low, and the 10-year yield dropped to 4.25%. President Trump responded by firing the head of the Bureau of Labor Statistics, accusing her of manipulating the jobs numbers — but gave no proof.
Analysts at ING said this could add uncertainty and make investors more cautious about holding U.S. dollars or bonds.
Other Big News: Fed Governor Resigns
The surprise resignation of Fed Governor Adriana Kugler also made headlines. This gives President Trump the chance to appoint a new Fed official — possibly someone more in favor of cutting rates, which would increase pressure on Fed Chair Jerome Powell.
Currency Moves
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Dollar Index: Down 0.2% to 98.722
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EUR/USD: Fell 0.2% to 1.1563
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GBP/USD: Down 0.1% to 1.3274
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USD/CHF: Up 0.6% to 0.8085
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USD/JPY: Up 0.3% to 147.94
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AUD/USD: Up 0.1% to 0.6482
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USD/CNY: Down 0.5% to 7.1763
The Swiss franc was hit hard after Trump placed high tariffs on Swiss goods, adding more pressure to its already low inflation.
Looking Ahead
With bond auctions and more economic data coming this week, investors will be watching closely to see if the Fed confirms a rate cut in September.
