Dollar Declines Amid Fed Rate Cut Speculation, Political Turbulence

The U.S. dollar has experienced a decline amid growing market speculation about potential Federal Reserve rate cuts, fueled by weaker-than-expected employment data and concerns over a slowing U.S. economy. President Donald Trump's nomination of Stephen Miran to the Council of Economic Advisers and his criticisms of Fed Chair Jerome Powell have intensified uncertainty about the Fed's future policy direction and independence. Despite rumors that Trump might fire Powell, the president denied such plans, though markets remain wary of any moves that could undermine the Federal Reserve's credibility and the dollar's status as a safe-haven currency. Traders now anticipate a rate cut as soon as the Fed's September meeting, reflecting the deteriorating labor market and ongoing trade tensions, including new tariffs imposed by Trump. The dollar's weakness is also reflected in its softness against the euro and yen, while inflation data next week is expected to further influence monetary policy decisions. Overall, political turbulence and economic indicators have combined to put downward pressure on the dollar and add volatility to currency markets.