The US dollar remained under pressure amid increasing expectations of Federal Reserve rate cuts and concerns about tariffs.
July’s weaker-than-expected nonfarm payrolls, along with significant downward revisions to prior months’ data, have amplified concerns over a slowing US labor market.
Markets point to a near certainty for an interest rate cut in the Fed’s September meeting and anticipate three rate cuts by the end of the year in total. If the cuts materialize, the dollar and treasury yields could come under increasing pressure.
Treasury yields recovered slightly from the large decline recorded on Friday after the NFP data, but remained stable overall. They could remain exposed to new data releases and could see some volatility in the case of a surprise.
In this regard, the jobless claims data later today could further forge expectations regarding monetary policy. A confirmation of a weaker job market could push the dollar and yields further to the downside, while stronger readings could help them reverse course.
