The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against a basket of six major currencies, continued its downtrend that began on June 19, as it traded around 97.20 during European hours on Monday (06/30). Traders are awaiting US employment figures due later this week, which could further provide fresh impetus on the US Federal Reserve's (Fed) policy outlook.

The US Nonfarm Payrolls report is expected to show the economy added 110,000 new jobs in June, down from 135,000 in May. The current range is between a high of 140,000 and a low of 75,000. Additionally, Unemployment is anticipated to rise to 4.3% from 4.2%.

The US dollar weakened amid growing expectations that the Federal Reserve (Fed) will cut interest rates at its September meeting. Data showed on Friday that US Personal Spending unexpectedly fell in May, the second decline this year. Meanwhile, US Personal Income fell by 0.4% in May, the biggest decline since September 2021.

US President Donald Trump posted on Truth Social on Monday, saying, "One big beautiful bill is going well!" The Trump administration has lowered costs, very substantially, for the American Consumer. There's never been anything like it!

The US dollar received downward pressure from Friday's dovish comments from Federal Reserve Bank of Minneapolis President Neel Kashkari, who noted that he was sticking to his view that cooling inflation would allow the Fed to cut its policy interest rate twice this year, starting in September.

However, Fed Chair Jerome Powell noted last week that Trump's tariff policies could lead to one-time price increases, but could also lead to more persistent inflation. The Fed should be careful in considering further rate cuts.

Source: FXStreet