The Bloomberg Dollar Spot Index fell as much as 1% — its worst day since April 21 — after July payrolls missed estimates and the previous two months were revised lower. The yen led gains, advancing 2.2% against the greenback, while the euro rose more than 1%. The weaker-than-expected labor report comes as President Donald Trump has been criticizing Fed Chair Jerome Powell for not lowering rates sooner.
“It’s now clear that the US labor market is cooling fairly sharply,” said Helen Given, a foreign-exchange trader at Monex Inc. “There’s a good chance Trump’s crusade against Chair Powell ratchets up further in the coming days and there could be further losses for the dollar to come as a result.”
The dollar had tumbled this year as Trump’s aggressive trade policies rocked the $7.5 trillion-a-day currency market, weighing on global growth outlook. The greenback found reprieve in July but new reports point to wider economic uncertainty, renewing its slide. It has lost more than 7% so far this year.
“If weakness in activity data in sustained going forward, it will make markets question the recent outperformance in US equities on the back of trade deal announcements that has been lifting the dollar relative to peers,” said Jayati Bharadwaj, a strategist at TD Securities.
