Forex Today: US Dollar struggles to find demand, all eyes on NFP

Eren Sengezer FXStreet

Here is what you need to know on Friday, June 2:

The US Dollar (USD) stays on the back foot early Friday after having suffered heavy losses against its major rivals on Thursday with the US Dollar Index trading below 103.50 in the European morning. The market mood remains relatively upbeat as focus shifts to the US Bureau of Labor Statistics' (BLS) May jobs report, which will include Nonfarm Payrolls (NFP) and wage inflation figures.

US Nonfarm Payrolls Report: Analyzing May NFP release.

On Thursday, the USD came under heavy bearish pressure after the BLS reported that the change in Unit Labor Costs for the first quarter got revised significantly lower to 4.2% from the advanced estimate of 6.3%. Moreover, Automatic Data Processing's (ADP) monthly report revealed that private sector employment in the US rose by 278,000 in May. Although this reading surpassed the market forecast of 170,000 by a wide margin, the soft wage inflation component of the report didn't allow the USD to gather strength. According to the CME Group FedWatch Tool, markets are pricing in a left than 30% probability of one more Federal Reserve rate hike at the upcoming meeting.

Meanwhile, the US Senate voted to pass the bill to suspend the debt-limit. Commenting on this development, “this bipartisan agreement is a big win for our economy,” said US President Joe Biden and told reporters that he will sign this bill into law as soon as Friday. Reflecting the risk-positive market atmosphere, main equity indexes in the US closed decisively higher on Thursday. Early Friday, US stock index futures continue to trade in the green in the early European session.

EUR/USD registered impressive gains on Thursday and erased all of its weekly losses. The pair continues to stretch higher and holds above 1.0750 in the European morning.

GBP/USD took advantage of the persistent USD weakness and rose to its highest level in two weeks above 1.2500 on Thursday. The pair clings to small daily gains near 1.2550 early Friday.

USD/JPY extended its slide into a fourth straight day on Thursday and broke below 139.00. The pair edges slightly higher but stays below that level on the last trading day of the week.

Gold price continued to push higher on Thursday as the benchmark 10-year US Treasury bond yield fell below 3.6% for the first time in nearly three weeks. XAU/USD consolidates its weekly gains at around $1,980.

US May Nonfarm Payrolls Preview: Analyzing Gold price's reaction to NFP surprises.

Bitcoin has gained traction and recovered above $27,000 from the weekly low it set near $26,500 in the Asian trading hours on Friday. Following a two-day slide, Ethereum has staged a rebound and was last seen rising more than 1% on a daily basis at around $1,900.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

AUD/USD bulls seem hesitant below 0.7050 ahead of RBA on Tuesday

AUD/USD reverses an Asian session dip on Monday as renewed optimism over Iran diplomacy boosts investor confidence, keeping a lid on the safe-haven US Dollar and supporting the risk-sensitive Aussie. Spot prices, however, remain below the one-month high, touched last Thursday, as bulls wait for the crucial RBA decision before taking fresh positions.

USD/JPY climbs to 158.00 neighborhood as BoJ uncertainty weighs on the JPY

The USD/JPY pair gains some positive traction at the start of a new week, recovering further from Friday's post-Bank of Japan (BoJ) swing low to sub-157.00 levels. The momentum lifts spot prices to the 158.00 neighborhood during the Asian session and seems unaffected by fresh intervention warning from Japan's Finance Minister Satsuki Katayama.

Gold recovers on positive US-Iran headlines

Gold extends its recovery during American trading hours on Monday, supported by falling Oil prices following positive headlines on US-Iran talks. The metal regains ground after hitting a fresh yearly low of $3,870 on Friday and ending October down 6.87%. However, the rebound lacks conviction as the fundamental backdrop continues to raise doubts over a sustained recovery.

Bitcoin braces for US midterm elections as historical sell-offs revive downside concerns

Bitcoin (BTC) braces for the impact of the US midterm elections, just a week after the $6 billion hack from Binance. Historically, congressional elections have negatively affected not just the president’s party but also Bitcoin. In the last 22 midterms, the ruling party has gained House seats only twice, while the three most recent elections coincided with Bitcoin’s bear market bottoms.

Why strong US growth could not stop the bond rally and AI selloff

The US economy grew at a 3.4% annual rate, yet Treasury yields fell and the Nasdaq ended October with its worst monthly performance since March 2025. The market is no longer rewarding capital expenditure simply because it supports growth. Investors are testing whether that expenditure can produce cash flow and returns above the cost of capital.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.