FX.co ★ DXY Holds Near 3-Year Lows Ahead of NFP, Tax Bill

The dollar index remained below 97 on Thursday, hovering near its three-year lows, as financial markets anticipated significant economic developments that could influence both monetary and fiscal policies. Market participants adjusted their expectations for strong employment figures following an unexpected decline in private-sector jobs reported by ADP. This downturn could prompt the Federal Reserve to accelerate its rate cuts. Concurrently, the House of Representatives progressed with passing President Trump's tax and spending bill, which awaits Congressional approval and is projected to increase the U.S. budget deficit by over $3 trillion. Additionally, markets were keenly awaiting updates on new trade agreements from the Commerce Department, particularly as the July 9 deadline for reintroducing Liberation Day tariffs approached. Tariffs on Vietnam were reduced from 46% to 20%, but negotiations with other major trading partners encountered challenges. Meanwhile, the dollar index found some support from a weaker British pound, as uncertainties surrounding the UK's fiscal policy exerted pressure on British financial markets.