 Dollar’s rebound on upbeat US jobs and services data proved short-lived, as the greenback faded again in early Friday trading. The greenback failed to hold gains amid a broader risk-on tone with both S&P 500 and NASDAQ closed at fresh record highs. Strong employment data gave policymakers room to wait, especially as they assess the fallout from tariffs following the July 9 truce deadline. Futures markets now assign a 95% probability Fed will hold rates steady at this month’s meeting. Meanwhile, expectations for aggressive easing are also fading. Markets now price in less than a 40% chance of three cuts in 2025, compared to higher odds earlier this month. Even so, reduced Fed cut expectations haven’t translated into Dollar strength. The greenback also found no lift from Washington. The House narrowly passed President Donald Trump’s tax-and-spending bill, marking a major political win but also reviving deficit concerns. The IMF flagged the bill’s likely impact on worsening the fiscal outlook, noting in its press briefing that fiscal consolidation remains a priority the US has yet to address. The Fund will update its growth projections in late July to reflect the bill’s effects. On trade, Trump escalated his tactics by announcing that tariff letters will be sent out to individual countries starting today. This would mark a clear pivot from deal-based diplomacy toward flat-rate enforcement. Each country will reportedly be told what tariff rates — typically between 20% and 30%. Trump called the unilateral approach “easier” and “more efficient.” ..... | 
