US stock futures dip as Trump’s firing of Cook sparks Fed independence fears
Investing.com-- Most Asian currencies firmed on Monday, while the dollar extended losses after softer-than-expected nonfarm payrolls data sparked uncertainty over the U.S. economy and interest rates.
But despite Monday’s gains, most regional currencies were nursing losses in recent sessions as concerns over U.S. President Donald Trump’s trade tariffs kept investors largely wary towards risk-driven markets.
A mixed outlook for U.S. interest rates also weighed, especially after the Federal Reserve signaled last week that it has no immediate plans to cut rates.
Among Asian currencies, the Japanese yen’s USDJPY pair rose 0.2%. The yen was an outlier among its peers last week, and saw a heavy dose of safe haven demand on Friday.
The Chinese yuan’s USDCNY pair fell 0.4%, while the Australian dollar’s AUDUSD pair was flat.
The South Korean won’s USDKRW pair fell 0.3%, while the Singapore dollar’s USDSGD pair fell 0.1%.
Dollar extends losses after soft nonfarm payrolls
The dollar index and dollar index futures both fell about 0.4% on Monday, extending steep losses from the prior session.
The greenback tumbled from two-month highs after nonfarm payrolls data read substantially weaker than expected for July. Payrolls data for the past two months was also revised down sharply.
The print pointed to a sharp cooldown in the U.S. labor market, and spurred fears that Trump’s tariffs were hurting the economy.
Trump’s firing of the head of the Bureau of Labor Statistics, after the payrolls data, also ramped up concerns over the credibility of U.S. economic data.
Friday’s data sparked bets that the Fed will cut interest rates soon, especially amid growing pressure from Trump for lower rates. The early resignation of Fed Governor Adriana Kugler also gives Trump the opportunity to name a new member to the Fed’s board.
Indian rupee flat ahead of RBI meeting
Despite Monday’s gains, most Asian currencies remained under pressure from uncertainty over Trump’s tariffs.
The Indian rupee was among the laggards in recent sessions, especially after Trump outlined a 25% levy on Indian goods. The USDINR pair rose slightly on Monday.
Trade talks between New Delhi and Washington are still ongoing, although no deal is expected soon.
Focus this week is also on a Reserve Bank of India (NSE:BOI) meeting, where the central bank is widely expected to cut interest rates further in the face of growing economic headwinds.