Dollar Slips as Soft Jobs Data Fuels Rate-Cut Buzz
Quick Summary
The U.S. dollar eased across EUR/USD dips ~0.1% to 1.1695, USD/JPY slips ~0.2% to ~147.3 (8:30 ET).
Soft jobs data revisions — possibly down 800K — fueled fed-cut expectations (Reuters) Reuters+1.
The euro and yen gained modestly on dollar pressure; global risk sentiment remains bullish.
Markets now pricing in a 25 bp Fed cut, with a growing chance of 50 bp next week.
So, here’s the market scene: the dollar eased today, nudged lower by whispers of downward job revisions and rising Fed-cut bets. The euro and yen picked up steam, and traders are eyeing 25–50 bp of cuts in the coming week. It’s a gentle shift, but one that sets a curious tone: can USD play catch-up, or is its slide only just beginning? Let’s dig into the turns.
Major Currency Pairs
EUR/USD traded lower, dropping about 0.1% to 1.1695 at 8:30 ET Reuters+1.
GBP/USD saw modest gains, trading around 1.3536, up ~0.03% Reuters.
USD/JPY softened to roughly 147.3, off ~0.2%, as markets digest rising fed-cut odds and weak U.S. labor outlook Forex+1.
Macro Drivers
Labor market gloom: Speculation of job data revisions up to 800K down put pressure on USD, turbo-charging Fed-cut expectations Reuters+1.
Fed rate-cut bets: Markets now price in a 89% chance of a 25 bp cut, and around 10% for a 50 bp move next week Reuters.
Global sentiment: With a universally softer dollar, currencies like the euro and yen rallied—commodity currencies also benefited.
Prediction & Outlook
Here’s what I’m watching over the next 48 hours: If labor data confirms slips, expect the dollar to test 97.5–97.3 on the DXY. EUR/USD could hold 1.17 but won’t break convincingly higher without CPI backing; USD/JPY may dip further into 146.8-147.0. In my view, the dollar's softness is likely to linger, unless a surprise hawkish Fed comment shows up.
Practical Impact for Traders
Watching DXY around 97.5 is key for gauging broader dollar flow.
If EUR/USD holds above 1.17, euro longs stay in play—but stay tight.
Keep tabs on USD/JPY range, especially the 147.0 level as potential break zone.
Risk assets likely get a tailwind if Fed signals dovish; note stock and commodity moves.
FAQ
Q: Why is the dollar reacting so sharply to job revisions?
Soft job outlook deepens Fed-cut expectations — traders are front-running that action.
Q: Is a 50 bp cut still realistic?
Not the base case, but priced in at ~10%. A truly weak CPI could push that higher.
Q: Will this USD weakness last?
That depends. Core CPI and Fed tone over the next 48 hours will tell. For now, USD bears have the edge.
Related Articles
Authors to Watch: Masha Vahrusheva
Sources
Dollar drops to 7-week low on labor data, Fed cuts expected — Reuters Reuters+1
USD/JPY steadies as NFP revisions spark Fed-cut bets — Forex.com analysis Forex
Current FX pair levels and changes — Reuters LSEG data Reuters+2Reuters+2
