US Dollar Drops After Jobs Report Misses June Forecast
June payrolls came in at just 57K versus a 110K estimate, sending the dollar lower and rattling pre-holiday markets.
The U.S. dollar fell sharply Thursday after June non-farm payrolls disappointed Wall Street, adding only 57,000 jobs against expectations of 110,000, a stark shortfall that initially sparked a bond rally and brief stock gains before mixed holiday-week trading muddied the picture. The Japanese yen emerged as the session's top performer, with USD/JPY briefly touching 160.65 before edging back to 161.14 amid signs of quiet intervention by Japanese officials.
The weak headline number puzzled analysts in part because it contradicted the JOLTS job openings data released earlier this week, which had pointed to a two-year high in labor demand. Adding to the confusion, hospitality employment posted large losses just weeks before the United States hosts the World Cup — a timing mismatch that traders found difficult to reconcile and that likely contributed to the reversal of early market moves.
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Despite the miss, other economic data offered some offset. Initial jobless claims came in at 215,000, slightly better than the 220,000 forecast, and May factory orders fell 1.3%, a smaller decline than the 1.8% drop economists had projected. Fed President Mary Daly noted that U.S. investment growth remains exceedingly strong, a signal that policymakers are unlikely to rush toward a rate cut based on a single soft payrolls print.
Gold surged $83 to $4,113 an ounce, while the S&P 500 slipped 0.3% and 10-year Treasury yields edged up just one basis point to 4.48%. WTI crude held flat near $68.48. The euro briefly climbed to a session high of 1.1472 against the dollar before surrendering roughly 40 pips. With U.S. markets set for a shortened session Friday as the country marks its 250th Independence Day, thin liquidity could amplify any further moves.
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