Dollar nosedives following terrible jobs data, Bank prepares for interest rate decision

After a week of clawing ground back from the pound and euro, the dollar’s gains were lost on Friday when new jobs data revealed a massive slowdown in US job growth and President Trump’s revised tariffs were revealed.

Looking to this time last Monday, the dollar is up 1.3% on the euro and 1% on the pound, but it was double that before Friday’s sharp drop.

The pound ended the week slightly up on the euro, sitting about 0.2% higher than it was last Monday, however that is nothing compared to the 1.5% gain it was seeing on Thursday. The pound lost that lead for no single discernible reason, showing how little momentum the currency has currently.

The big event for the pound this week is Thursday’s Bank of England interest rate decision. While analysts still predict the Monetary Policy Committee will cut interest rates, rising UK unemployment and inflation, along with Trump’s new round of tariffs, may cause the bankers to vote for a hold.

The dollar is in a particularly vulnerable spot this week. On Friday, the Bureau of Labor revealed that just 73,000 people found work across the US in July – far lower than expected. But, worse, the organisation also revealed that it had miscounted previous month’s numbers, downwardly revising them by more than 250,000. It seems like clear evidence of a slowdown in the labour market following Trump’s tariff policies.

In response, Trump fired the Erika McEntarfer, the head of the department’s statistics division, claiming she had rigged the numbers to make him look bad. This reaction, coupled with a new wave of tariff announcements, sent the dollar plummeting. After all, without unbiased statistics reporting, the market will no longer be able to trust the numbers that come out from the Bureau of Labor.

This week we will likely see the continuing fallout of that decision.

Meanwhile, in Europe, while the EU bubbles with resentment that, after months of negotiations, the bloc only managed to arrange a 15% tariff with the US, the same as many countries that have nowhere near the same heft, this week has few data releases that are likely to drive significant change. It is only on Thursday, when Germany publishes its balance of trade report, that we will see how US tariffs have impacted the country’s imports and exports.

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GBP: Interest rate decision looms

The pound saw significant gains on the euro and major losses to the dollar through last week, but by Friday those shifts levelled out to only a 0.2% rise on EUR and 1% drop against USD. This week brings the much-anticipated Bank of England interest rate decision.

GBP/USD past year

EUR: Losing its momentum

The euro has been 2025’s strongest performer, making significant gains on the dollar, but last week saw it stumble. Much-delayed US trade tariffs shocked the global markets and the euro seems to have lost pace, dropping more than 2.5% against the dollar at one point last week.

EUR/USD past year

USD: Fallout from firing set to continue

The dollar had been making steady gains through last week but Friday brought the news that the US job market had been underperforming significantly for months. The impact of Trump’s decision to fire the head of statistics at the Bureau of Labor will likely continue through today.

USD/GBP past year

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