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Poor US jobs report causes EUR/USD surge as investors expect Fed rate cuts
EUR/USD jumped from 1.1391 to 1.1554, gaining over 1% due to US jobs data. The July Nonfarm Payrolls revealed only 73,000 new jobs, much lower than expected, which raised predictions for two Federal Reserve interest rate cuts by December.
Wall Street experienced losses amid worries about a slowing US economy. Manufacturing activity contracted, and consumer sentiment saw a slight decline, contributing to a grim economic outlook.
Canadian dollar unexpectedly recovers against US dollar after chaotic US employment report
The Canadian Dollar rose against the US Dollar on Friday. This change happened as the US Dollar weakened due to disappointing US Nonfarm Payrolls data, which showed fewer job additions than expected and downward revisions for previous months.
The Canadian Dollar’s movement reflected overall US market trends and investor sentiment. The Federal Reserve highlighted the need for stable inflation and showed signs of weakness in the US labor market, influencing expectations for rate cuts.
USD/CAD Movement
The USD/CAD rate fell below 1.3800 after six days of gains for the US Dollar. The Nonfarm Payroll figures for July showed only 73,000 jobs added, much less than the expected 110,000. Additionally, revisions for May and June totaled a decline of 258,000 jobs. Several factors affect the Canadian Dollar, including the Bank of Canada’s interest rates, oil prices, economic health, inflation, and trade balance. The trade relationship between the US and Canada is also significant. Economic indicators such as GDP, PMIs, employment statistics, and sentiment surveys impact the value of the Canadian Dollar. A strong economy may lead to interest rate hikes by the Bank of Canada, boosting the currency, while weak data can lead to a decrease in value. Given the weak US jobs report, market sentiment has shifted significantly. The US Dollar has lost ground, pushing the USD/CAD pair below the crucial 1.3800 level after a week of gains. This suggests a likely lower trend for the pair in the near future.Federal Reserve Impact
The unexpected dip in July’s Nonfarm Payrolls, which totalled only 73,000 against the forecast of 110,000, gives the Federal Reserve reason to consider rate cuts. The US Q2 GDP growth has slowed to 1.6%, and the most recent Core PCE inflation rate for June 2025 has eased to 2.7%. These factors support a more dovish Fed stance, with futures now indicating over a 70% chance of a rate cut at the September 2025 meeting, up from just 40% last week. In contrast, the Canadian economy seems stronger, highlighting a clear difference in policy approach. Today’s jobs report from Canada showed an increase of 41,000 jobs, exceeding expectations and maintaining the unemployment rate at 5.5%. With WTI crude oil prices remaining above $85 per barrel this past month, the Bank of Canada is under less pressure to cut interest rates compared to the US. This situation recalls a similar trend from late 2023 when markets began anticipating Fed rate cuts before other central banks, resulting in a broad decline in the US dollar over several months. We might be starting to see a similar pattern emerge in the summer of 2025. This historical context suggests that the current move against the dollar may continue to gather strength. In the upcoming weeks, we should explore strategies that could benefit from a steady decline in USD/CAD. This might involve buying Canadian Dollar call options or selling out-of-the-money put options on the pair to earn premiums. The break below 1.3800 serves as a signal to position for further CAD strength, with a potential target around the 1.3650 level seen in early June 2025. However, we need to keep an eye on next week’s US CPI inflation data, which is the most crucial upcoming report. An unexpectedly high inflation figure could quickly change market sentiment and lead to a sharp rally in the US Dollar. Therefore, it’s wise to remain flexible in our positions ahead of that release. Create your live VT Markets account and start trading now.CFTC oil NC net positions in the United States increased from 153.3K to 156K
The oil net positions in the United States CFTC have risen from 153.3K to 156K. This change reflects a shift in market sentiment or activity regarding oil.
In currency markets, the EUR/USD climbed over 1.1550 after disappointing US employment figures were released. Meanwhile, GBP/USD bounced back above 1.3250 as the US dollar weakened.
Gold prices increased to recent weekly highs of around $3,350. This rise happened as US Treasury bond yields decreased, which affected expectations for the Federal Reserve’s interest rates after weak jobs data.
Cryptocurrency markets are facing challenges after a strong July. Bitcoin fell below $115,000, looking toward the $112,000 support level while liquidations in the crypto market increased.
In the euro area, the economy showed resilience, boosted by the EU-US deal and Germany’s spending plans. However, there are still risks of more cuts later this year or early next year, depending on wage growth.
The rise in CFTC oil net long positions suggests that institutions remain optimistic about higher prices. This belief is supported by the latest Energy Information Administration (EIA) report from late July 2025, which noted a surprising decrease in crude inventory by 3.1 million barrels. This is a positive sign for the weeks to come, making long positions in WTI futures appealing.
The broad weakness of the US dollar offers a good chance in currency markets. This trend emerged after the disappointing July 2025 Non-Farm Payrolls report, which indicated job growth of just 95,000 instead of the expected 180,000. We see this as an opportunity to favor long positions in EUR/USD and GBP/USD as expectations for Federal Reserve tightening adjust.
Gold’s rise to $3,350 is a direct response to weak US job data, which led the 10-year Treasury yield to drop to 3.5%. Historically, similar situations in the late 2010s show that falling yields and a weaker dollar benefit precious metals. We expect further growth for gold and suggest considering buying call options targeting the $3,400 mark.
In the cryptocurrency market, a necessary correction is happening after July’s high performance. The drop of Bitcoin below $115,000 is due to over $500 million in long position liquidations in the last two days. Caution is advised as we wait for prices to stabilize around the $112,000 support level before making new long investments.
The euro area’s strength is further supported by a slight increase in the July 2025 German IFO Business Climate index. However, the European Central Bank remains concerned about wage growth, indicating potential rate cuts later this year. We can take advantage of the current strength but should also prepare for possible reversals in the fourth quarter.
CFTC reports S&P 500 NC net positions of -$163.2K, down from -$168.5K
The US Commodity Futures Trading Commission reports that S&P 500 net positions are at $-163.2K, an improvement from $-168.5K. This reflects a change in trader sentiment for this popular stock market index.
In the currency markets, EUR/USD has climbed past 1.1550, supported by weak US employment and manufacturing data. Similarly, GBP/USD is now above 1.3250 after a six-day slump due to these same economic indicators.
Precious metals are gaining traction as gold hits a weekly high near $3,350, benefiting from falling US Treasury yields. This trend follows a reevaluation of the Federal Reserve’s interest rate policies after disappointing employment figures.
In the cryptocurrency realm, Bitcoin and some altcoins are struggling despite July’s all-time highs. Bitcoin has dropped below $115,000 as market pressures grow, raising concerns about more potential declines.
The euro area’s economy is showing unexpected strength, helped by agreements between the EU and US, along with increased spending in Germany. However, there might still be a chance for a rate cut later this year or early 2026, depending on wage developments.
The recent changes in S&P 500 net positions indicate that while overall sentiment remains bearish, there is some easing of pressure. Moving from $-168.5K to $-163.2K suggests that short sellers are taking profits after the index’s late July decline. We may want to sell out-of-the-money puts to earn premium, betting that the market has found a temporary base thanks to the weak economic data.
The US dollar is weakening significantly after July 2025’s non-farm payroll report showed only 95,000 jobs added, far below the expected 180,000. This disappointing employment data, along with a manufacturing PMI that dropped to 48.5, supports strength in other currencies. We think buying EUR/USD and GBP/USD call options is a smart way to capitalize on this dollar weakness in the coming weeks.
Gold is behaving as expected, surpassing $3,350 as US 10-year Treasury yields fell from 4.1% to 3.8% this past week. This movement resembles what we saw in late 2023 when fears about the Fed’s policies drove investors towards gold. We should consider adding to long gold futures positions, aiming for the $3,400 level if yields stay low.
In the crypto market, we see a typical “risk-off” response even with a weaker dollar, as traders cash out profits after the July 2025 highs. Bitcoin’s fall below $115,000 suggests that during times of economic uncertainty, money tends to flow into traditional safe havens like gold rather than digital assets. We should remain cautious and think about buying protective puts for our Bitcoin and Ethereum holdings.
The euro area’s surprising economic resilience makes the euro particularly appealing against the dollar right now. The recent EU-US trade agreements have provided a notable boost, contrasting with the slowdown in the US. While we’re optimistic about the euro for now, we need to monitor upcoming wage growth data, as any weakness there could lead to discussions about an ECB rate cut for late 2025.
CFTC’s gold net positions in the US drop to $223.6K from $253K
The Commodity Futures Trading Commission (CFTC) has noted a drop in gold net positions in the U.S., falling to $223.6K from $253K. This information is important for understanding trends in the gold market and recent trading activities.
In the foreign exchange market, the EUR/USD rose above 1.1550 after weaker than expected U.S. Nonfarm Payrolls and ISM Manufacturing PMI data led to increased selling of the U.S. dollar. Meanwhile, GBP/USD bounced back, trading above 1.3250 due to disappointing U.S. economic reports.
Gold Market Dynamics
The gold market experienced an upswing, with prices hitting a weekly high of around $3,350. This increase was linked to dropping U.S. Treasury bond yields, leading investors to rethink the Federal Reserve’s approach to interest rates after weak payroll numbers. In the cryptocurrency market, strong selling pressure returned after a bullish July, where Bitcoin and several altcoins saw significant gains. Bitcoin prices fell below $115,000 as sellers targeted support at $112,000, resulting in rising liquidations. In the Eurozone, economic resilience surprised many, supported by the EU-U.S. deal and increased German spending. However, there are still risks of a potential rate cut, depending on future wage trends and economic indicators. Gold prices have risen to around $3,350 an ounce, yet large speculators have reduced their net long positions to $223.6K. This difference suggests that while the market reacts to weak U.S. economic data, some savvy investors might be taking profits at these peaks. We’ll keep an eye on whether this rally can keep going or if it becomes a bull trap.Dollar Weakness And Opportunities
The U.S. dollar is facing significant challenges after the July 2025 Nonfarm Payrolls report showed only 95,000 new jobs, far less than the expected 180,000. As a result, the market has raised the likelihood of a Federal Reserve rate cut in September. Fed funds futures now indicate a 55% chance, up from just 20% last week. We can expect further dollar weakness against major currencies in the coming weeks. With the dollar weakening, there are opportunities to go long on the euro and the pound. The EUR/USD breaking above 1.1550 is a strong bullish sign, although we need to be cautious about a potential rate cut in the Eurozone, which could limit gains if upcoming wage data disappoints. The outlook for GBP/USD above 1.3250 seems clearer, making it a potentially better trade as we prepare for a softer dollar. In the crypto market, momentum has shifted significantly after a strong July. Bitcoin has fallen below $115,000, with over $500 million in leveraged long positions liquidated in just 48 hours. This aggressive selling is reminiscent of sharp pullbacks seen during the 2024 market cycle, suggesting we should be careful and wait for support at $112,000 to hold before considering new investments. Create your live VT Markets account and start trading now.Net positions for GBP NC in the UK changed from £0.6K to £-12K.
The net positions for GBP have fallen to £-12K, down from £0.6K previously. This indicates a weaker outlook for the British currency in the market.
EUR/USD jumped over 1.1550 due to disappointing US employment and ISM Manufacturing PMI data. This trend shows the Euro gaining strength while the US Dollar faces pressure at the week’s end.
Reversal In GBP/USD
GBP/USD turned positive above 1.3250 after a six-day decline. The drop in US Nonfarm Payrolls and Manufacturing PMI data played a key role in this turnaround. Gold prices reached a weekly high of about $3,350, boosted by lower US Treasury bond yields. This suggests that the market is reassessing the Fed’s rate outlook. In cryptocurrency news, Bitcoin fell below $115,000 after a strong July. Investors are nervous due to tough market conditions and possible downturns in August. The euro area’s economy is holding strong, supported by an EU-US deal and increased spending in Germany. Even though there are risks of rate cuts later on, indicators point to economic resilience.Weak Sentiment For The British Pound
With net short positions on the British Pound now at -£12K, this is a notable change from last week, pointing to weak sentiment for Sterling. We haven’t seen such bearishness since the economic uncertainties of late 2024. The recent rise in GBP/USD above 1.3250 likely stems from dollar weakness rather than any real strength in the pound. The US Nonfarm Payrolls report was disappointing, showing just 95,000 jobs instead of the expected 180,000. This report heavily influences current market sentiment. As a result, the likelihood of a Federal Reserve rate cut by year-end has surged to over 60%, a major leap from just 35% last week. This makes shorting the dollar against stronger currencies an appealing strategy for the coming weeks. With the dollar weakening, the Euro stands as a key winner, especially with EUR/USD surpassing the 1.1550 resistance level. Recent data showing Eurozone Q2 GDP growth of 0.5%, better than expected, supports this view of underlying economic strength. We might explore call options on EUR/USD to take advantage of potential further gains. Gold’s rise to $3,350 an ounce can be linked to the US 10-year Treasury yield dipping below 3.0% for the first time in six months. This shift indicates a move toward safe assets and a reevaluation of interest rate expectations. As long as yields remain low, gold is likely to keep attracting buyers, possibly retesting earlier highs. Bitcoin’s decline below $115,000 could signal the end of the summer rally, so we should tread carefully. Historically, August has often been a month of correction for Bitcoin after strong summer performances, a trend that seems to be repeating. Rising selling volume suggests that traders are taking profits, so protective puts or reducing long exposure might be wise. Create your live VT Markets account and start trading now.Net positions for Australia’s CFTC AUD NC were $-78.1K, down from $-81.3K.
The latest data from the Australian Commodity Futures Trading Commission shows that net positions for the AUD are now at -78.1k, an improvement from -81.3k. This slight change is a positive sign.
In currency news, the EUR/USD has risen above 1.1550, aided by disappointing employment and ISM Manufacturing PMI data from the US. The GBP/USD also climbed over 1.3250 after a rebound due to weak US job figures.
Gold prices hit weekly highs near $3,350 as US Treasury bond yields dropped, prompting a rethink of the Federal Reserve’s interest rate plans. This change boosted the value of XAU/USD.
On the other hand, the cryptocurrency market is facing difficulties, even after a strong July. Bitcoin fell below $115,000, with sellers hoping for support around $112,000 due to rising liquidation levels.
The euro area’s economy remains stable, supported by the EU-US agreement and increased spending in Germany. However, there are still concerns about a potential interest rate cut, making wage trends important to watch.
Traders in the EUR/USD market should look for brokers that offer competitive spreads and quick execution to navigate the Forex market effectively.
Due to weak US job data, the dollar is expected to weaken in the upcoming weeks. The Non-Farm Payrolls report from July 2025 showed only 95,000 jobs added, much lower than the expected 180,000. This supports the idea of attractive long positions in pairs like EUR/USD and GBP/USD.
With this clear trend, buying near-term call options on EUR/USD seems wise, especially as it rises past 1.1550. The US ISM Manufacturing PMI also fell into contraction at 48.5, indicating that dollar weakness might continue through August. This approach allows for defined risk while following the current trend.
Gold’s rise to $3,350 is closely linked to decreasing US Treasury yields and a reassessment of the Federal Reserve’s plans. According to the CME FedWatch Tool, the chance of a Fed rate cut by December 2025 has increased from 25% last month to over 60% after the recent data. This means call options on gold futures are likely to be in high demand.
For the Australian dollar, the slight improvement in net short positions isn’t strong enough to signal a buy. The net position remains quite bearish at -78.1k, likely due to concerns about China’s economy, especially after their July Caixin PMI barely remained above expansion at 50.1. Selling out-of-the-money call options on the AUD could allow for premium collection while acknowledging the overall negative sentiment.
In the crypto market, Bitcoin is showing signs of weakness as it drops below $115,000. Recent data from Coinglass indicated over $400 million in long position liquidations within just 24 hours last week, indicating strong selling pressure. It’s important to keep an eye on the $112,000 support level, and consider protective puts if it breaks.
CFTC reports a decrease in net positions for JPY from ¥106.6K to ¥89.2K
Japan’s latest data shows a drop in CFTC JPY net positions, falling from ¥106.6K to ¥89.2K. This change reflects wider economic trends that are affecting currency markets around the world.
In other news, the EUR/USD rate has risen above 1.1550, helped by disappointing US economic data, including poor employment numbers and a weak ISM Manufacturing PMI. Meanwhile, GBP/USD has bounced back, trading over 1.3250 due to the weakness of the US dollar.
Gold prices have hit new weekly highs, trading around $3,350. This rise is supported by lower US Treasury bond yields, which have prompted a reevaluation of the Federal Reserve’s interest rate plans. However, Bitcoin and other cryptocurrencies are struggling in August, following a strong July.
The Eurozone is showing surprising strength, thanks to the EU-US deal and increased spending in Germany. Still, there are concerns about possible interest rate cuts. Monitoring wage indicators will be key to predicting future monetary policy actions.
Choosing the right broker is crucial for trading EUR/USD successfully in 2025. The best brokers offer competitive spreads, fast execution, and strong platforms, catering to both new and experienced traders in the ever-changing forex market.
Speculators are reducing their short positions on the Japanese Yen, with net positions falling sharply. This aligns with the disappointing US jobs report for July 2025, where non-farm payrolls added only 150,000 jobs, falling short of the 220,000 expected. Derivative traders may view this as a signal to consider buying JPY calls, anticipating Yen strength if US data continues to weaken.
The Euro’s rise above 1.1550 is directly linked to the weak US dollar. Additionally, German factory orders for June 2025 surprised many by increasing 1.5% month-over-month, indicating solid core economic health in Europe. Given these trends, buying call options on the EUR/USD with a strike price near 1.1600 could be a smart strategy in the upcoming weeks.
The British Pound is rising past 1.3250, largely due to the dollar’s decline. This increase is also supported by the latest Bank of England meeting minutes, which suggested a tougher approach to combat inflation after June 2025’s CPI came in at 3.1%. Traders might want to consider long positions in GBP/USD futures, as this pair benefits from US weakness and a more aggressive UK policy.
Gold is performing well, surpassing $3,350 an ounce as US Treasury yields fall. The 10-year Treasury yield has dropped to 2.95%, dipping below the important 3.00% mark for the first time since early 2025. Traders should consider buying gold futures or call options to take advantage of this trend, as lower yields mean less opportunity cost for holding gold.
Although July was strong for Bitcoin, early August is showing signs of weakness. Trading volumes on major exchanges have fallen by about 20% compared to July, and sentiment has been affected by news of a potential SEC investigation into staking services. Traders should remain cautious, possibly looking at protection strategies like put options or reducing leverage on long positions until there is more regulatory clarity.
CFTC’s net positions for the Eurozone drop to €123.4K from €125.5K
Eurozone’s CFTC EUR net short positions decreased from €125.5K to €123.4K. This reflects changes in euro trading positions.
EUR/USD rallied, trading above 1.1550 after disappointing US employment figures. The US Dollar weakened due to weaker Nonfarm Payrolls and ISM Manufacturing PMI data.
Market Rally
GBP/USD recovered, trading positively above 1.3250. This change occurred after US job reports fell short of expectations, leading to a short-term bounce for the pair. Gold prices rose to nearly $3,350, achieving new weekly highs. This rise was fueled by declining US Treasury yields and a revised outlook on the Federal Reserve’s rate plans. The cryptocurrency market faces difficulties despite a strong July. Bitcoin dropped below $115,000 as the market adjusts to challenges, with potential support around $112,000. In the euro area, the economy proved strong over the summer. A deal between the EU and US, along with Germany’s spending plans, improved prospects. However, signs of weaker wage indicators could lead to future cuts. A guide for choosing top brokers for EUR/USD trading in 2025 is available. It features brokers with competitive spreads and fast execution, ideal for both beginners and experienced traders.Currency And Commodity Trading Strategies
Following a disappointing US jobs report last Friday, the dollar has weakened significantly. Nonfarm Payrolls added only 95,000 jobs, far below expectations, and the July ISM Manufacturing PMI dropped to 48.9, indicating contraction. We should be cautious about holding long positions in the US dollar for now. The EUR/USD is pushing above the 1.1550 level, and this trend may continue. Although large traders are still net short on the euro, their positions are decreasing, suggesting a change in sentiment. With Eurozone inflation steady at 2.5% last month, buying near-term call options on the EUR/USD might capture further gains. The British Pound is showing strength against the dollar, with GBP/USD back above 1.3250. However, we should note recent UK retail sales data from late July showed a surprising decline, hinting at some domestic weakness. Selling GBP/USD put options could be a worthwhile strategy, collecting a premium while betting that the pair stays above key support levels. Gold has surged to nearly $3,350 as US Treasury yields decline. The 10-year yield just fell below 3.90% for the first time since May 2025, often supporting gold rallies, similar to what occurred during the Fed’s easing cycle in 2019. Buying gold futures or call options is a straightforward way to trade this momentum. In the crypto market, we need to be more cautious after a strong July. Bitcoin has fallen below $115,000, and testing the $112,000 support level seems likely in the coming days. Traders may consider buying protective put options or selling out-of-the-money call options if they expect consolidation. The market is reevaluating the Federal Reserve’s future path, leading to significant volatility across asset classes. This environment favors strategies that benefit from price fluctuations, such as long straddles on major currency pairs ahead of upcoming inflation data. The key is to remain flexible, as expectations for future interest rate changes will continue to evolve. Create your live VT Markets account and start trading now.Dow Jones Industrial Average drops over 800 points after disappointing jobs report
The Dow Jones Industrial Average (DJIA) dropped nearly 2% on Friday, falling more than 800 points at its lowest point. The market struggled to recover after a disappointing Nonfarm Payrolls (NFP) report showed fewer jobs were added in July than expected.
The Dow hit a five-week low of 43,330 and encountered resistance around the 50-day Exponential Moving Average. Overall, the index suffered its worst week since April, falling over 3% from Monday’s opening near 45,000.
