The U.S. dollar slipped on Thursday amid bond market volatility and fresh labor market data that bolstered expectations of Federal Reserve rate cuts this month. Job openings fell to a 10-month low in July, highlighting a softer jobs outlook, though layoffs remain limited.
Traders now see a 97% chance of a September rate cut, according to CME FedWatch, with markets pricing in 139 basis points of easing by the end of 2025. ING’s chief international economist, James Knightley, expects the Fed to deliver 25 basis-point cuts at its September, October, and December meetings.
The euro held firm at $1.1658, sterling stabilized at $1.3442, and the yen traded at 148.12 per dollar. The dollar index stood at 98.178 after a 0.17% drop.
Bond markets remain in focus, with rising yields reflecting concerns over fiscal health in major economies. U.S. 30-year yields briefly touched 5% before easing to 4.89%. Japan’s 30-year government bond yield was at 3.27%, near record highs, ahead of a key auction.
Analysts warn that high debt-to-GDP ratios across advanced economies could force painful spending cuts or tax hikes amid mounting political pressures.
Elsewhere, the Australian dollar held at $0.6545 and the New Zealand dollar traded at $0.5881.