The US dollar posted slight gains against both the euro and the Japanese yen, but remained near the lows recorded on Friday, after weak US jobs data boosted bets on Federal Reserve interest rate cuts and triggered a sharp selloff in the US currency.

Goldman Sachs expects the Federal Reserve to implement three consecutive interest rate cuts of 25 basis points starting in September, with the possibility of a 50-basis-point cut if the next jobs report shows a further rise in unemployment.

The firm also believes that the European Central Bank (ECB) has already concluded its monetary easing cycle.

Meanwhile, economists raised their growth forecasts for the Eurozone and Japan following what were described as moderate trade agreements, while affirming that Fridays US jobs report showed the American economy is nearing a recession.

Elsewhere, analysts said that the dismissal of the Bureau of Labor Statistics (BLS) director on Friday and the resignation of Federal Reserve Governor Adriana Kugler could prompt the Federal Open Market Committee (FOMC) to adopt a more assertive stance in order to defend its independence. They noted that Kuglers replacement would have only one vote on the committee.

The euro was last down 0.12% at $1.15592, after hitting $1.15855 on Friday.

The US Dollar Index which measures the performance of the dollar against six major currencies stood at 98.816, after earlier touching a one-week low of 98.609.

Thierry Wizman, global interest rates and currency strategist at Macquarie Group, stated: Traders have likely concluded that the jobs report gave President Donald Trump further justification to fire Jerome Powell.

He added: Or at least more support to appoint someone structurally more dovish as Fed Chair, noting that the recent employment data has shifted the markets outlook on the federal funds rate target one year from now.

Interest Rate Cuts

Financial markets now indicate a 92% probability that the Federal Reserve will cut interest rates at its upcoming September meeting, up from 63% a week ago. Markets are also pricing in a total of 130 basis points in rate cuts by October 2026, up by 30 basis points from expectations before Fridays jobs data.

The Japanese yen fell by 0.14% to 147.3 per dollar, after minutes from the Bank of Japans June monetary policy meeting showed that some board members said the central bank might reconsider rate hikes if trade tensions ease.

Focus remains on trade-related uncertainty, following new tariffs imposed by Trump last week on imports from dozens of countries, which have raised concerns about the health of the global economy.

The Swiss franc extended its losses for a second consecutive day, falling 0.1% to 0.8089 against the dollar, after declining 0.5% in the previous session. However, it remains stronger than its levels before Fridays data, when it traded around 0.8128.

Switzerland is seeking to present a more attractive offer in its trade talks with Washington, aiming to avoid a 39% US tariff on its exports a move that threatens the countrys export-dependent economy.

In other currency markets, the Australian dollar declined by 0.05% to $0.6464, while the New Zealand dollar dropped by 0.1% to $0.5898.