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Dollar drops, stocks climb as weak US jobs data eases rate fears

Published August 7, 2026 at 11:17 PM UTC

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The U.S. dollar slipped against major currencies on Tuesday while equity markets in Asia and Europe moved higher, after the latest employment report showed weaker-than-expected job growth.

The report, released by the U.S. Labor Department, indicated that payrolls added fewer jobs than analysts had projected and that the unemployment rate remained unchanged, suggesting a cooling labor market.

Traders interpreted the data as a signal that the Federal Reserve may not need to accelerate its tightening cycle, easing fears of another rate hike later this year. A softer dollar makes U.S. exports more competitive, while lower borrowing costs lift risk appetite.

In Singapore, the Straits Times Index rose modestly as investors shifted into equities, and local exporters welcomed the prospect of a weaker greenback boosting overseas demand. Currency‑dependent sectors such as tourism and technology also stood to benefit.

Market participants will watch the Fed’s next policy statement and upcoming inflation readings for clues on whether the easing trend will continue. Any surprise in future jobs data could quickly reverse the rally.