Dollar Steadies After Strong U.S. Jobs Report, Trade Tensions Rises

The US dollar remained firm on Friday, recovering from earlier lows against major currencies as markets understood upbeat economic data and braced for more pressure from the US ahead of a key tariff deadline. 

Job Data Lifts Dollar Confidence 

Stronger than expected, US job growth gives the dollar fresh momentum. The Liberty Department reported a gain of 147,000 nonfarm payroll jobs in June, far above the 110,000 expected by economists. This fuels investors’ confidence about the economic resilience and the hopes for an interest-rate cut by the Federal Reserve in July. Following the jobs report, traders pushed the chances of a rate cut this month down to just 5% up from 24% a week earlier.   

The dollar index, which tracks the greenback against a basket of six major currencies, bounced back after its worst first half since 1973. It rose as concerns about inflation and US fiscal spending were momentarily overshadowed by strong labour markets and stock markets. 

Markets Await July 9 Tariff Deadline

Investors are also watching President Donald Trump’s trade strategy. After pushing his tax and spending bill through Congress, he is now focused more on trade. He announced the US will begin sending letters to countries on Friday outlining specific tariff rates. 

Countries like Japan and others are yet to finalise the agreement with the US before the July 9 deadline, before steep tariffs are implemented. The shift is creating fresh urgency for trade talks, even as concerns grow over the rising national debt, which is now set to increase by $3.4 trillion due to the new bill. 

Against the Japanese yen, the dollar dipped 0.2% to 144.69 yen after gaining sharply in the previous US session. The euro moved up by 0.1% while the British pound rose to $1.3668. The Australian dollar also gained to $0.6577.

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