The dollar is being punished for the jobs data that revealed how weak the U.S. economy really was
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In notes to clients from ING, analyst Chris Turner called it: “The dollar’s handbrake turn.”
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3 min read
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investment
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August 4, 2025
11:42 AM
Fortune
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Finance·The dollar is being punished for the jobs data that revealed how weak the U.S. economy really wasBy Jim EdwardsBy Jim EdwardsExecutive Editor, Global NewsJim EdwardsExecutive Editor, Global NewsJim Edwards is the executive editor for global news at Fortune
He was previously the editor-in-chief of Insider's news division and the founding editor of Insider UK
His investigative journalism has changed the law in two U.S. federal districts and two states
Supreme Court cited his work on the death penalty in the concurrence to Baze v
Rees, the ruling on whether lethal injection is cruel or unusual
He also won the Neal award for an investigation of bribes and kickbacks on Madison Avenue.SEE FULL BIO PM Images via Getty ImagesThe dollar, which has lost value all year against foreign currencies, had been making a comeback in recent weeks
But Friday’s jobs number from the BLS—and the downward revisions to previous numbers that accompanied it—“knocked the stuffing out of the dollar’s rally,” ING says
The U.S. dollar fell off a cliff on Friday after the Bureau of Labor Statistics dramatically revised downward its estimates of how many jobs the American economy was creating
The economy, it turned out, was far weaker than everyone had assumed
The dollar has lost value all year
It is currently down nearly 9% YTD against the DXY, an index of foreign currencies, as investors flee President Donald Trump’s tariff barriers
In June, the USD hit a low of more than 10%, but in recent weeks, the dollar has been gaining ground
The dollar fell from 100.22 on the DXY on Friday to 98.82 this morning—a relatively large move for a currency the size of the dollar
Credit: Google Finance “The dollar index suffered its biggest one-day drop since May 23 as swiftly reassessed the outlook for rates and growth,” George Vessey of Convera told clients in a note
In notes to clients from ING, analyst Chris Turner called it: “The dollar’s handbrake turn.” “Friday’s soft jobs report knocked the stuffing out of the dollar’s rally
Investors now attach an 80% bability to a 25bp rate cut from the Federal Reserve in September,” he wrote. “Uncertainty the quality of U.S. data is not a good look for U.S. asset and could add some more risk premium both into the dollar and Treasuries.” Goldman Sachs called it “USD: Whiplash week.” The bank also published a subdued note from chief economist Jan Hatzius that forecast U.S
GDP growth would be only 1% in the second half of the year
His colleague Kamakshya Trivedi argued that although the “media narrative” suggested that Trump had somehow won deals that were “negative” for the U.S.’s trading partners, most foreign exports—which go to other countries—won’t be affected. “We expect that the U.S. will bear most of the cost of the tariffs, which will weigh on its terms of trade
This is partly because of the breadth of the tariff increases, which will make it difficult for U.S. firms and consumers to find suitable substitutes,” he wrote
That’s why the dollar is so much weaker on foreign exchanges this morning
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