Weak Start for Bitcoin, Ether in August as Dollar Rallies and Yen Sinks to Multi-Month Low Ahead of U.S. Labor Data

Major cryptocurrencies wavered on Friday as renewed U.S. tariff measures and a strengthening dollar pressured broader risk markets. Bitcoin (BTC) and Ether (ETH) both saw volatile trading, as traders reacted to macroeconomic uncertainty and shifting monetary expectations.

BTC, ETH Reverse Early Losses but Stay Volatile

Bitcoin briefly dipped to $114,290 before rebounding to around $115,900 by midday, nearly testing a key uptrend support drawn from April and June lows. Ether followed a similar path, falling to $3,616 before recovering toward $3,690, according to CoinDesk data.

The early selloff reflected jitters from President Donald Trump’s newly announced global tariffs, coupled with the dollar index (DXY) breaking above the 100 mark for the first time since late May. The DXY has now risen over 3% in the past month, reflecting heightened expectations for persistent inflation and tighter financial conditions.

Tariff Expansion Fuels Inflation Concerns

President Trump late Thursday announced an expansion of tariffs on imported goods, maintaining a 10% universal tariff on inbound goods but raising the rate to 15% for countries running trade surpluses with the U.S. Several Southeast Asian economies were hit with even steeper levies.

The new measures have intensified fears of inflation. According to June data, the core personal consumption expenditures (PCE) index—widely seen as the Fed’s preferred inflation gauge—rose 2.8% year-over-year, matching May’s figure and reaching its highest level since February.

“Tariffs are finally feeding through into inflation data,” said Robin Brooks, senior fellow at the Brookings Institution. “That’s now lifting the dollar.”

Fed Holds Steady as Rate Cut Bets Recede

On Tuesday, the Federal Reserve left its benchmark interest rate unchanged at 4.25%, citing the need for greater disinflationary confidence. The move sharply reduced market expectations for a near-term rate cut. CME FedWatch data now shows just a 41% probability of a September cut—down from 58% a week ago and over 75% one month earlier.

“The Fed’s hawkish pause has reset expectations,” said Matt Mena, digital asset strategist at 21Shares. “The upcoming payrolls report will be pivotal.”

Yen Hits 4-Month Low on Dovish BOJ Stance

The Japanese yen weakened to 150.50 per U.S. dollar in Friday’s Tokyo session, its lowest since April. The decline followed dovish remarks from Bank of Japan Governor Kazuo Ueda, who signaled caution on tightening policy in the near term.

All Eyes on U.S. Jobs Report

Markets are now focused on Friday’s nonfarm payrolls data, which could influence both Federal Reserve policy and crypto price direction.

“If labor data shows economic cooling, the Fed may consider easing,” Mena noted. “That would be a major tailwind for crypto. Bitcoin’s path toward $150,000–$200,000 remains intact if liquidity returns.”