The Dollar Index dropped to a 10-week low after a U.S. appeals court blocked President Trump’s attempt to remove Fed Governor Lisa Cook, pending her lawsuit, while Stephen Miran was confirmed as a new Fed board member.
The Euro held steady despite Fitch downgrading France’s credit rating from AA- to A+ due to rising government debt, political polarization, and fiscal concerns, with the yield spread between French and German 10-year bonds widening.
The U.S. dollar has remained largely unchanged on the day, holding slightly higher following Tuesday’s significant downward revision of 911,000 jobs in the 2025 nonfarm payrolls data, which has bolstered expectations for a Federal Reserve rate cut next week—likely 25 basis points.
The U.S. dollar remains under pressure on Tuesday despite a stronger-than-expected U.S. NFIB small business optimism survey, as markets remain bearish following last Friday’s disappointing NFPs, pushing the Dollar Index to a seven-week low.
The U.S. dollar weakened following a disappointing 22,000 non-farm payrolls miss on Friday, fueling expectations for Federal Reserve rate cuts.
The U.S. dollar remains resilient despite mixed U.S. economic data this week, including underwhelming JOLTS job openings and ISM manufacturing, with focus on the upcoming Non-Farm Payrolls report.
Foreign exchange markets have calmed since yesterday, though the Japanese yen continued to weaken. Today’s data focus includes the US JOLTS report, factory orders, and the Fed’s Beige Book, with remarks expected from hawkish Fed voter Musalem.
North American traders returning from long weekends will notice a stronger U.S. dollar, driven by heightened safe-haven demand due to rising global long-end bond yields, with the UK at the forefront.
The U.S. dollar has been declining since yesterday, returning to pre-Powell levels, with increased pressure following comments from President Trump’s economic adviser, Kevin Hassett, suggesting Federal Reserve Governor Cook should take leave.
The U.S. dollar regained its strength from before Federal Reserve Chair Powell’s recent Jackson Hole speech, driven partly by euro weakness due to France’s political and fiscal issues, as well as demand for the dollar ahead of the U.S. Core PCE Price Index release.
