Ex-Goldman Strategist: Dollar’s decade-long rise may reverse — strong US jobs could weaken USD
Robin Brooks, former chief FX strategist at Goldman Sachs, says the decade-long pattern where the US dollar strengthens after stronger-than-expected US nonfarm payrolls is about to reverse. He argues a structural shift will lead traders to sell the dollar when US employment data beats expectations. Brooks points to market expectations of Fed rate cuts and potential Fed policies that cap long-term nominal yields; in that scenario, robust nonfarm payrolls could lower real yields, reducing the appeal of US assets and pressuring the dollar. He cites the February 11 release of an unexpectedly strong January jobs report as evidence that strong jobs data no longer boosts the dollar and may have the opposite effect. Brooks also references political pressure on the Fed — mentioning former President Trump’s repeated calls for rate cuts — as part of the backdrop influencing market expectations. The view is presented as market commentary, not investment advice.
Bearish
Brooks’ argument implies a structural shift: stronger US employment no longer mechanically supports the dollar. For crypto traders, a weaker USD environment tends to lift dollar-denominated risk assets, but the mechanism here is specific — expectations of Fed rate cuts and policies that cap long-term nominal yields could reduce real yields and make US assets less attractive. Historically, dollar weakness around easing cycles (or when markets price in cuts) has correlated with rallies in risk assets including Bitcoin and equities. Short-term, traders may see increased volatility around US jobs releases as market reactions flip — strong jobs prints could trigger dollar selling and short-term crypto rallies. Long-term, if persistent Fed easing and yield caps materialize, a weaker dollar and looser financial conditions can be bullish for crypto risk appetite. However, the path is uncertain: political pressure on the Fed or policy surprises could reverse expectations quickly, producing sharp moves. Risk management: watch USD index (DXY), US real yields, Fed guidance, and immediate post-nonfarm price action; consider shorter timeframes for trading around data releases and avoid levered positions unless correlation signals are clear.