The US Dollar is currently experiencing downward pressure, falling for the fourth consecutive session as traders react to anticipated changes in Federal Reserve leadership and increasing expectations for a rate cut in September. Soft economic data, including stagnation in the services sector and a weaker-than-expected jobs report, are contributing to the dollar’s decline against the Euro.
- The dollar index fell to 98.4.
- President Trump will name a nominee to replace outgoing Fed Governor Adriana Kugler by the end of the week.
- Trump has narrowed his list of candidates for Fed Chair Jerome Powell’s replacement to four finalists.
- Market expectations for a rate cut in September have surged to around 90%.
- The ISM report showed an unexpected stagnation in the services sector, accompanied by rising price pressures.
- The US economy added just 73K payrolls in July, with significant downward revisions to figures from the previous two months.
- President Trump dismissed BLS Commissioner Erika McEntarfer.
- The dollar was mostly lower against the euro.
The confluence of factors suggests a weakening outlook for the US Dollar. Anticipated changes in the Federal Reserve’s leadership, combined with disappointing economic indicators, are fueling speculation about potential rate cuts. This has created a less favorable environment for the dollar, which is reflected in its recent decline against other major currencies. The prospect of lower interest rates typically makes a currency less attractive to investors, which can further contribute to its depreciation.