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Dollar Consolidates After Weak Jobs Report, Fed Nominations in Focus
5 Aug
Summary
- Dollar rises but remains near Friday's lows after weak jobs data
- Market awaits Fed's response, including potential rate cuts
- Trump nominates new Fed and BLS officials, signaling dovish shift
On August 5, 2025, the U.S. dollar rose but remained within sight of its Friday lows, as the market continued to consolidate following a weak jobs report that increased expectations of a Federal Reserve rate cut next month.
Investors were also focused on President Donald Trump's nominations to the Federal Reserve Board, including his choice for commissioner of the Bureau of Labor Statistics. The market is closely watching these changes, as they could transform the Fed into a more dovish central bank, in line with what Trump wants.
According to Eugene Epstein, head of trading and structured products at Moneycorp in New Jersey, the dollar is currently in a "purgatory" period, waiting for next week's consumer price index (CPI) data to provide more clarity on the economic outlook and the Fed's policy path. Epstein noted that the Fed is not in a rush to cut rates and is not seeing significant signs of inflation.
The article also reported that the U.S. services sector unexpectedly showed a flat outcome in July, with little change in orders and a further softening in employment, even as input costs climbed. This data had little immediate impact on the currency market, as investors remained focused on the broader economic and policy developments.
