Dollar Slips as Euro Rises Following US Jobs Data.

Dollar Slips as Euro Rises: The U.S. dollar continued its slide on Wednesday, losing ground against major peers such as the euro, yen, and Swiss franc. The decline came after fresh labor market data revealed weakening job demand, raising expectations that the Federal Reserve could soon pivot toward an interest rate cut.

This shift in sentiment has fueled volatility across currencies, bond markets, commodities, and even cryptocurrencies. Let’s break down what happened, why it matters, and what to watch next.

✨ Key Takeaways

• Dollar Weakness: The greenback fell broadly after disappointing U.S. jobs data.
• Euro Strength: The euro rallied 0.34% to $1.1672 against the dollar.
• Yen & Franc Gains: The dollar lost ground to both the yen and Swiss franc.
• Bond Yields Slide: U.S. Treasury yields declined as investors priced in rate cut hopes.
• Sterling Strengthens: The British pound rose amid U.K. gilt market volatility.
• Gold at Record High: Spot gold soared to $3,567.16.
• Bitcoin Climbs: Cryptocurrencies also benefited, with bitcoin topping $112,000.

📊 Weak Jobs Data Sparks Market Moves

The trigger for Wednesday’s market reaction was the Job Openings and Labor Turnover Survey (JOLTS) from the U.S. Labor Department. The report showed job openings fell more than expected to 7.181 million in July, missing forecasts of 7.378 million.

This decline is significant because it signals cooling demand for workers—a sign that the labor market, once red-hot, may finally be losing momentum. Since the Federal Reserve has repeatedly emphasized labor market strength as a key factor in setting interest rates, weaker jobs data is now fueling bets that the central bank will cut rates sooner than previously expected.

💬 “Between Powell’s dovishness at Jackson Hole, weak payrolls, and now weak JOLTS, the momentum is clearly shifting. If Friday’s jobs report also disappoints, the Fed will have little choice but to lean more dovish,” said Eugene Epstein, head of structuring for North America at Moneycorp.

💵 Dollar Weakens Across the Board

The greenback erased earlier gains and fell against most major currencies after the JOLTS release:

• Dollar vs. Yen 🇯🇵: Down 0.2% at 148.04
• Dollar vs. Swiss Franc 🇨🇭: Down 0.11% at 0.803
• Dollar vs. Euro 🇪🇺: Euro up 0.34% at $1.1672
• Dollar Index 📉: Fell 0.36% to 98.047

This broad weakness highlights how sensitive markets are to labor market indicators and Fed expectations.

📈 Bond Market Reaction

The U.S. Treasury market also moved swiftly after the data. Yields on government bonds fell, reflecting expectations of lower interest rates ahead:

• 2-Year Yield: Fell 4.6 basis points to 3.613%
• 10-Year Yield: Dropped 5.6 basis points to 4.221%

Since short-term yields are more closely tied to Fed policy, the sharper decline in the 2-year note underscores investor conviction that rate cuts could be on the horizon.

💷 Sterling Gains Amid U.K. Bond Volatility

The British pound strengthened against the dollar, rising 0.38% to $1.3442. The move came despite volatility in the U.K.’s government bond market, where 30-year gilt yields climbed to their highest levels since 1998.

The euro, meanwhile, slipped 0.24% against sterling to 0.86795.

🇯🇵 Yen Pressured Despite Dollar Weakness

Interestingly, while the dollar weakened against the yen, Japan’s bond market added its own layer of volatility. The 30-year Japanese government bond yield hit record highs, putting pressure on the yen and limiting its strength against the dollar.

Political developments also added intrigue. Hiroshi Moriyama, Secretary-General of Japan’s ruling party and a close aide to Prime Minister Shigeru Ishiba, announced his resignation—another factor weighing on sentiment.

🪙 Commodities & Crypto Join the Rally

The ripple effects of weaker U.S. data extended beyond currencies and bonds.

• Gold 🪙: Spot gold surged to an all-time high of $3,567.16 as investors sought safe-haven assets amid uncertainty.
• Bitcoin ₿: The world’s largest cryptocurrency climbed 0.78% to $112,288.58, reflecting risk appetite in digital assets.

Both assets highlight how investors are diversifying in anticipation of policy shifts and economic uncertainty.

🔮 What’s Next for the Dollar?

Markets are now laser-focused on Friday’s U.S. non-farm payrolls report, which could confirm whether the labor market slowdown is real and sustained.

If payrolls data comes in weak again, expectations for a September rate cut by the Fed could rise sharply, further pressuring the dollar while supporting gold, euro, and other major currencies.

💬 “I think everybody is trying to maintain their positioning heading into Friday’s jobs number. The focal point now is the jobs market,” said Epstein.

📌 Final Thoughts

The dollar’s decline after weak U.S. jobs data reflects a bigger story: investors are preparing for a Federal Reserve pivot. The euro, pound, and franc all benefited, while bond yields slipped, gold surged, and bitcoin edged higher.

The coming days—especially Friday’s jobs report—will be critical in shaping the outlook for U.S. monetary policy. Until then, markets are likely to remain volatile as traders reposition and brace for the next move.

✅ Quick Market Snapshot (Wednesday Close)

👉 In short: The dollar is on the back foot, the euro is gaining strength, and markets are now waiting for the all-important U.S. jobs report to confirm the next big move.