Dollar Tumbles as Jobs Data Disappoints, Spurring Rate Cut Bets

The U.S. dollar took a significant hit on Friday, responding to disappointing employment figures released earlier in the day. Employers in the United States added a mere 73,000 jobs in July, contrary to the anticipated 100,000, according to data from Reuters economists. This data revision spurred speculation about potential rate cuts by the Federal Reserve, influencing market behaviors.

Consequently, the dollar index experienced a decline, losing 1.09% to settle at 98.94. Investors watched as the euro surged by 1.22% to $1.1554, and the dollar weakened against the Japanese yen, dropping 1.58% to 148.35. In addition, geopolitical factors, such as tariffs enforced by President Trump's administration, added further complexity to the currency landscape.

Traders reacted instantly, scaling up expectations for Federal Reserve rate cuts by year-end. Forecasting 54 basis points of cuts, they anticipated a September cut, hinging on upcoming job reports. Meanwhile, the Swiss franc and Canadian dollar witnessed fluctuations due to tariff impacts, with the former falling and the latter strengthening against the dollar.

(With inputs from agencies.)