Dollar Drops After Jobs Miss, But Bounce Fades Fast
June payrolls came in at 57K versus 110K expected, hammering the dollar before holiday flows muddied the picture.
The June non-farm payrolls number just punched the dollar square in the face. Only 57K jobs were added versus the 110K the Street expected — a massive miss that triggered immediate dollar selling, a bond bid, and a quick stock pop. But here's the thing: none of those moves stuck.
Pre-holiday flows took over and scrambled the signal. The euro spiked to 1.1472 and then quietly gave back 40 pips. USD/JPY briefly dipped to 160.65 before climbing back to 161.14. The yen is the clear winner on the day, helped along by what looks like Japanese stealth intervention. The dollar is the clear loser — just not by as much as the initial knee-jerk suggested.
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The confusing part of this report is the contradiction. Earlier this week, the JOLTS survey hit a two-year high in job openings. Yet actual hiring cratered. On top of that, hospitality jobs — which should be booming right before the World Cup — posted large losses. That's the kind of internal inconsistency that makes traders second-guess the trade, and explains why the moves faded so quickly.
The bottom line for Fed watchers: this print relieves zero pressure on the Fed to do anything. Chair Daly was out today talking up strong investment growth in the US economy. The data doesn't force a cut, and it doesn't force a hike. Neutral stays the call. Gold, meanwhile, doesn't care — it ripped $83 higher to $4,113. Thin Friday markets ahead as the US marks 250 years of independence, so watch for exaggerated moves in low liquidity.
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