USD Faces Crucial Week: OBBBA Vote, NFP Jobs Data & Tariff Truce

USD Outlook: A Critical Week for the US Dollar Amid Senate Bill, Jobs Report, and Tariff Deadline

Three Key Catalysts Could Reshape the Dollar Outlook

The first half of July is shaping up to be a turning point for the FX market. Investors are watching three crucial developments:

Senate debate over the "One Big Beautiful Bill Act" (OBBBA)
Thursday's Nonfarm Payrolls report
Expiration of the mutual tariff truce on July 9

OBBBA Narrowly Advances, But Uncertainty Remains

The OBBBA survived a razor-thin 51–49 procedural Senate vote to open debate. However, the bill's future remains uncertain, as amendment votes begin today and at least eight Republican Senators have expressed opposition. Analysts highlight concerns over rising debt levels, with the Congressional Budget Office estimating the Senate version would add $3.3 trillion to the federal deficit over a decade — more than the House version.

Upcoming NFP Data & Tariff Deadline to Influence USD Direction

Thursday's US jobs report is another focal point. Markets expect softer job creation, which could reinforce expectations for Federal Reserve rate cuts in Q3. Additionally, the July 9 expiry of the US-China tariff truce looms large. Failure to renew could reignite trade tensions and increase risk-off sentiment.

USD Vulnerable to Political and Economic Shocks

As fiscal risks rise and uncertainty over policy direction intensifies, the US Dollar (USD) may face increased downside pressure. The DXY index, already hovering near multi-month lows, remains sensitive to both political signals and macroeconomic surprises.