Bloomberg Dollar Spot Index falls to day’s low on payrolls miss

Bloomberg Dollar Spot Index falls to day’s low on payrolls miss

The Bloomberg Dollar Spot Index dropped to its lowest level of the day on July 2, 2025, following a miss in the July nonfarm payrolls report. The index, which tracks the value of the US dollar against a basket of major currencies, fell by 0.1% [1]. This decline was driven by concerns over the economic outlook and the impact of President Donald Trump’s sweeping import tariffs.

The dollar’s weakness was further exacerbated by the anticipation of the July jobs report, which indicated that companies were becoming more deliberate in their hiring. The report showed employment likely moderated after a June increase, while the unemployment rate was seen ticking up to 4.2% [1]. This data suggested that the economy might be slowing down, which could negatively impact the dollar's value.

The tariffs announced by Trump, including a 10% global minimum and 15% or higher duties for countries with trade surpluses with America, have created significant uncertainty in the global markets. The tariffs are expected to increase the average US tariff to 15.2%, up from 13.3% earlier, significantly higher than the 2.3% in 2024 before Trump took office [1]. This has led to concerns about the impact on growth and inflation, overshadowing the AI-driven optimism that has buoyed megacap technology stocks.

The Stoxx 600 benchmark in Europe fell more than 1% to a one-month low, with pharmaceutical stocks including Novo Nordisk A/S, GSK Plc, and AstraZeneca Plc leading declines after Trump demanded drug companies lower US prices [1]. The MSCI All Country World Index fell for a sixth day, the longest streak since September 2023 [1].

The decline in the Bloomberg Dollar Spot Index is a reflection of the broader market sentiment, which is increasingly cautious about the economic outlook in the face of rising tariffs and uncertain job growth. As traders await further economic data and policy announcements, the dollar’s value will likely remain volatile.

References:
[1] https://finance.yahoo.com/news/asian-stocks-decline-tariffs-dollar-015758217.html