Mixed US Nonfarm Payrolls data, investors more confident on two Fed rate cuts before end of 2024

Matthew Ryan, CFA Ebury

At first glance, June's NFP data might appear to be slightly better than expected, failing to confirm the recent signs of a mild loosening in the US labour market. Yet, this impression is misleading. Indeed, the headline reading showed a slightly higher-than-expected change in nonfarm employment (206k vs. 190k).

This was, however, a very minor surprise, accompanied by a sizable downward revision to the last two months' data (-111k) and an unexpected rise in the unemployment rate (to 4.1%). Meanwhile, wage growth eased as expected (to 0.3% MoM and 3.9% YoY) and is now printing at levels much more comfortable for the Fed.

As the June report did not clearly stand out in either direction, the US dollar depreciation was negligible - the EUR/USD pair remains in a tight range, slightly above the 1.08 level. The market-implied rates pricing also changed very modestly, with investors now just a tad more encouraged that we will witness 2 rate cuts before the end of the year. We agree with this assessment.

Now, the markets' attention once again shifts to inflation data and the ongoing presidential campaign, which should be key for USD volatility in the coming weeks.

Author

Matthew Ryan, CFA

Ebury

Matthew is Global Head of Market Strategy at FX specialist Ebury, where he has been part of the strategy team since 2014. He provides fundamental FX analysis for a wide range of G10 and emerging market currencies.

GBP/USD defends 1.3300 after strong upbeat UK PMI data

Following Thursday's sharp decline, GBP/USD clings to small gains above 1.3300 in the European session Friday, supported by the upbeat UK Retail Sales and July PMI data. Nevertheless, the pair's upside remains capped as investors cling to a cautious stance amid a further escalation of tensions in the Middle East. The US economic calendar will feature preliminary July PMI data later in the day.

EUR/USD holds gains near 1.1400 after strong German, EU PMIs

EUR/USD is holding gains near 1.1400 in European trading on Friday. The Euro draws support from an unexpected increase in the German and Eurozone business PMI readings for July. However, further upside appears limited by escalating conflicts in the Middle East, despite the ECB's hawkish hold decision. The US PMI data are next in focus.

Gold climbs above $4,050 on retreating USD; upside seems limited amid Fed hike bets

Gold builds on its modest intraday bounce and climbs back above the $4,050 level, hitting a fresh daily high during the first half of the European session amid a modest US Dollar pullback. The fundamental backdrop, however, warrants some caution before confirming that the pullback from an over two-week high, touched on Wednesday, has run its course and positioning for any meaningful upside.

Ethereum: Derivatives interest in ETH improves, but signs of caution remain

Ethereum is hovering slightly below the $1,900 level, down 3% on Thursday following a slight expansion in derivatives interest. The top altcoin's open interest has increased to 14.60 million ETH, marking a 600K ETH increase over the past two days and its highest level since June 7.

Crypto Market Overview: Bitcoin tests 50-day EMA support – Pi Network and Sky lead losses

The broader cryptocurrency market faces headwinds with rising tensions between the US and Iran, pushing Bitcoin down to its 50-day Exponential Moving Average support around $65,135 on Friday. Under pressure, Pi Network and Sky emerge as the worst-performing crypto assets over the last 24 hours.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.