US Dollar Index remains above 98.50, concerns rise as Trump dismisses BLS Commissioner

• The US Dollar Index bounces back after posting a decline of nearly 1.5% on Friday.
• The latest US jobs report increased the likelihood of two Fed rate cuts.
• Market caution increases as the Trump administration dismissed BLS Commissioner Erika McEntarfer weaker jobs data.

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is holding its position after registering around 1.5% losses in the previous session. The DXY is trading around 98.70 during the Asian hours on Monday.

The US Dollar struggled over a worse-than-expected jobs report in the United States (US) released on Friday, which prompted market reaction to price in two interest rate cuts by the Federal Reserve (Fed). Traders are now pricing in 63 basis points (bps) of cuts by year-end, up from around 34 bps on Thursday, with the first cut seen in September.

US Nonfarm Payrolls (NFP) in the United States (US) rose by 73,000 in July, compared to a 14,000 increase (revised from 147,000) seen in June. This figure came in weaker than the market expectation of 110,000. Additionally, the Unemployment Rate ticked higher to 4.2% in July from 4.1% in June, as expected.

Additionally, new concerns arise as the Trump administration dismissed Bureau of Labor Statistics (BLS) Commissioner Erika McEntarfer after a weaker-than-expected jobs report. This action could be a broader strategy to undermine the credibility of official inflation data, with potential implications for markets and Fed policy debates.

US President Donald Trump on Sunday defended his decision in a post on his Truth Social platform, asserting that the dismissed BLS Commissioner was responsible for "the biggest miscalculations in over 50 years," citing Friday's disappointing jobs report as the latest example.