Euro jumps to 1.1455 as weak US jobs data batters dollar

The euro surged past 1.1455 against the dollar after US payrolls data missed expectations, sending the greenback to its biggest weekly drop in three months.

The US dollar suffered its steepest weekly decline in nearly three months Friday after June nonfarm payrolls came in well below forecasts, pushing EUR/USD above 1.1455 for the first time since early April. The US Dollar Index plunged as traders repriced the path for Federal Reserve interest rate cuts.

"The data confirms the labor market is cooling faster than the Fed anticipated, which strengthens the case for rate cuts as early as September," said James Okafor, macro analyst at Edgen. "The dollar's yield advantage is eroding in real time."

June payrolls rose by fewer jobs than expected, while data for the prior month was revised lower, the Labor Department reported Friday. The unemployment rate fell to 4.2 percent, though the decline partly reflected a drop in labor force participation. The disappointing print marked the second consecutive month of below-consensus job growth.

The euro's rally above 1.1455 broke from the narrow range it had held since May, when the common currency traded between 1.12 and 1.14. The dollar's decline accelerated after the jobs data, with the greenback on track for its largest weekly drop since early April, according to Bloomberg data.

For the Federal Reserve, the weakening labor market adds pressure to begin easing policy sooner than previously signaled. Fed officials had projected a gradual approach to rate cuts in 2026, but futures markets now price a higher probability of three quarter-point reductions starting as early as September, according to CME FedWatch data. The next Fed meeting is scheduled for late July, though most economists expect the first move to come at the September gathering.

The weaker dollar lifted other major currencies as well, with the British pound and Japanese yen both gaining against the greenback. A sustained dollar decline would provide relief for emerging-market economies that have faced currency depreciation and imported inflation over the past year, while boosting demand for risk assets including equities and commodities.

This article is for informational purposes only and does not constitute investment advice.