U.S. Dollar Rebounds After Volatile Week Amid Labor Data and Fed Speculation

The U.S. dollar clawed back losses against major currencies following a turbulent week marked by mixed employment data and political upheaval. Friday's weaker-than-expected jobs report initially pressured the greenback, compounded by President Trump's dismissal of Bureau of Labor Statistics Commissioner Erika McEntarfer ahead of critical Fed rate decisions.

Currency markets reacted sharply to the dual shocks of Fed Governor Adriana Kugler's resignation and the labor department shakeup. The dollar index plunged 1.5% against the Euro and 2% versus the Yen on August 1 before stabilizing. By Monday, it had regained 0.2% against the currency basket to 98.86, with the Yen trading at 146.60 and the Euro slipping to $1.156.

Treasury yields mirrored the dollar's volatility, with 2-year notes hitting a three-month low of 3.659% and 10-year yields falling to 4.206%. The Australian dollar's 0.8% August 1 gain partially reversed by Monday, while the Swiss Franc held steady at 0.8041 per dollar.