📘 Introducing your essential guide to setting a Budget Rate in 2025. Download it now to learn how to set a strategic budget rate and manage currency risk.

Unpacking the US Labor Report, Tariffs, and Global Market Resilience

  • Go back to blog home
  • Blog
    Blog|Currency Updates
    Blog|In The News
    Blog|International Trade
    Charities & NGOs
    Currency Updates
    Currency Updates|In The News
    Ebury Institutional Solutions
    In The News
    In The News|Press
    International Trade
    Press
    Special Report
  • Latest

8 September 2025

Written by
Ebury

A
tentative dollar rally came to a sudden end Friday after the release of the weak August labor market report, which suggested the great US jobs machines grinding to a halt.Markest quickly priced in cuts in the three remaining Federal Reserve meetings left in 2025, bonds rallied and stocks sold off. While the weakness in the US labor market is undeniable, we note that market responses remained muted outside the bond market, and the dollar and the stock market ended the week not far from where they started it. All in all, the dollar remains resilient so far to its main two head winds: institutional degradation in the US and a clear slowdown in the US economy.

AUD

Last week’s second quarter GDP report provided a pleasant upside surprise. The Australian economy expanded by 1.8% year-on-year (vs. 1.6% estimate) and by 0.6% on the quarter (vs. 0.5%), the joint fastest pace of growth since the end of 2022. The more timely data on business activity was also rather pleasing on the eye. The composite index was revised up to 55.5 in August, confirming the fastest pace of growth since April 2022.

The recent resilience shown in the data should continue to ease fears over the state of the domestic economy, which appears to be ticking along quite nicely, despite the lingering fears over the tariffs. This will far from derail additional RBA rate cuts, but it should take pressure off the bank from delivering aggressive easing in the coming months, and that can only be a positive development for AUD.

NZD

It has been a slow couple of weeks on New Zealand’s economic calendar, causing the kiwi to trade primarily in response to U.S. developments. The most significant news was PM Luxon’s announcement that the new RBNZ governor will be named within the next few weeks. Following governor Orr’s abrupt, early departure in March, his deputy Christian Hawkesby replaced him for a six-month period, which is set to end on October 7th, a day before the next RBNZ meeting. The appointment of a new RBNZ governor should bring some stability to the institution, which has faced challenges recently, including the resignation of its board chair due to criticism over the lack of transparency surrounding Orr’s exit.

Focus this week will be placed on Friday’s manufacturing PMI index, with markets still on the fence on whether the RBNZ will lower rates one or two more times by year-end, following August’s dovish cut.

USD

The US labor report for August put to rest the debate as to whether the labor market is stalling. Only 22k jobs were created in the month, essentially a rounding error. Further, the revisions to past months numbers were negative again´, and in fact June was the first month that saw a net jobs loss since the COVID pandemic. Unemployment ticked up, and wage gains were anemic. The negative impact of Trump’s tariffs on the economy is now undeniable, as manufacturing employment has now shrunk for the fourth month in a row and business surveys invariably mention tariff related disruption as a major headwind. With a Fed cut in rates guaranteed later in the month, all eyes are now on September CPI inflation, which is expected to show yet another month of above target inflation and confirm the US is in the midst of full’on stagflation.

SHARE