'Get Out Of US Dollar Before It's Too Late,' Says Peter Schiff As Greenback Wallows Near 7-Week Low: Spotlight Shifts To BLS Annual Revision

The U.S. dollar continued to trade lower in overnight trading following a two-session retreat that began with the release of the monthly U.S. jobs data on Friday.

The U.S. Dollar Index (DXY), which measures the value of the greenback against a basket of currencies belonging to Washington's major trading partners, edged down 0.06% to 97.36 late Monday. The index, which traded at 98.5 ahead of the non-farm payrolls report, has lost nearly 1% since then.

The overnight low of 97.32 marks the lowest level since July 23, when it dipped to an intraday trough of 97.21. 

The Invesco DB US Dollar Index Bullish Fund (UUP), an exchange-traded fund (ETF) that tracks the performance of the Deutsche Bank Long US Dollar Index (USDX) Futures Index, has gained over 1% since it hit a 52-week low of $26.81 on July 1.

In overnight trading, the UUP ETF was unchanged, while it has lost 7.17% year-to-date (YTD) compared to the 11.37% gain for the SPDR S & P 500 ETF (SPY) and the 13.53% advance by the Invesco QQQ Trust (QQQ). 

In a post on X, Gold bull and economist Peter Schiff said,“Get out of the U.S. dollar now, before it's too late. Got gold?” He based his call on a looming Fed rate cut.“Ever since Alan Greenspan rescued the stock market after the 1987 crash, the Fed has made a series of increasingly bad monetary policy mistakes,” he said. 

“But the mistake the Fed is about to make will likely be the worst yet.”

On Stocktwits, retail sentiment toward the UUP ETF remained 'bearish' (32/100) by late Monday, but the message volume was at 'extremely high' levels.

Last Friday, the Bureau of Labor Statistics (BLS) reported that the economy added jobs at an anemic pace of 22,000 in August and the jobless rate climbed to the highest level since October 2021. The weak data sent rate cut bets soaring to 100%, with the CME FedWatch Tool showing that some futures traders even braced for a 50 basis point cut at the upcoming September 16-17 Federal Open Market Committee (FOMC) meeting.

Forex traders are likely to keenly watch the BLS' preliminary estimate for the March 2025 annual benchmark revision, which is scheduled to be announced at 10 a.m. ET on Tuesday. The revision is done to the data from the Establishment Survey.

The data used for the revision comes from the Quarterly Census of Employment And Wages (QCEW), which provides comprehensive employment counts based on state unemployment insurance (UI) tax records for the preceding March.

Economists at Wall Street firms such as Wells Fargo, Comerica and Pantheon expect the BLS's preliminary benchmark revision for the year through March 2024 to show a nearly 800,000 downward adjustment, a Bloomberg report said. This translates to a roughly 67,000 downward revision per month, on average. 

Other firms, such as Nomura, BofA, and Royal Bank of Scotland, have put the numbers closer to one million. 

Last year, the BLS reduced the previously reported job additions for the 12-month period that ended March 2024 by 818,000. President Donald Trump cited this as one of the reasons for firing former BLS Commissioner Erika McEntarfer, accusing her of inflating the numbers to make the previous Biden administration's economic performance appear more favorable.

Another sharp downward revision would question the strength seen in the first four months of the year, when the economy added an average of 127,000 jobs. It was only since May that the number has looked bad, averaging 27,000 per month.

Confirmation of a weak labor market is seen as the trigger that could prompt the Federal Reserve, under Jerome Powell, to announce its first rate cut this year. Morgan Stanley, which has a more conservative estimate for the annual revision (50,000 per month), said in a note released Friday that“It will be hard for markets or the Fed to ignore this signal in light of a moderating economy.”

A Fed rate cut would weigh down on the dollar, given that it would decrease the appeal of investing in the U.S. and, in turn, reduce the demand for the dollar, which also faces pressure from lower bond yields. Lower growth and the Fed's willingness to tolerate above-target inflation could push yields further lower, posing headwinds to the dollar.

Morgan Stanley analyst James Lord reportedly said in a note on Friday that the firm wasn't convinced the dollar weakness has run its course.“On the contrary, we think its decline is barely halfway through,” he added.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

MENAFN09092025007385015968ID1110035224