The US dollar edged higher on Friday following the release of the June non-farm payrolls report, which showed the U.S. economy added 206,000 jobs—exceeding market expectations. Despite this, the unemployment rate ticked up to 4.1%, the highest since late 2021, sparking speculation that the Federal Reserve could begin cutting interest rates as early as September. Meanwhile, wage growth slightly cooled to 3.9% on a yearly basis, reinforcing market sentiment that labor market conditions are softening.
In response to the mixed data, the DXY US Dollar Index rose modestly, as traders balanced robust job creation with a rising jobless rate. The euro weakened against the dollar after the data release, while the Japanese yen remained relatively stable. Market focus now shifts to upcoming Fed commentary and the Consumer Price Index (CPI) report next week, which will offer further clues about the Fed’s monetary policy direction.
Read more on EUR/USD trading.