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Non farm payroll data dragged down the US dollar, gold broke through in the short term, and the market is betting on the Federal Reserve to cut interest rates early
forex7 months before
Summary：The May non farm payroll data in the United States was significantly lower than market expectations, and the US dollar index fell in response. Non US currencies collectively rebounded, and gold broke the $2350 mark in the short term. The market's expectation for the Federal Reserve to cut interest rates in Q3 2025 has increased, and the volatility of the foreign exchange market has significantly intensified.
The foreign exchange market experienced a critical data shock this Friday. The May non farm payroll report in the United States showed that only 187000 new jobs were added, far lower than the previously predicted 220000. The unemployment rate rose to 4.1%, a new high since 2022. This data reinforces the market's judgment that the Federal Reserve has completed its rate hike cycle and may cut interest rates in the third quarter.
Affected by this, the | | | US Dollar Index (DXY) fell below the 103 mark on the same day, closing down for the third consecutive trading day. | |. Investors quickly adjusted their positions, and non US currencies rebounded across the board: | | | EUR/USD rose to 1.0975 | |, setting a new high in nearly a month; | |; GBP/USD breaks through 1.2800 mark | | |; The Japanese yen rebounded strongly against the US dollar to around 155.80, as the demand for safe haven increased. Meanwhile, safe haven assets have shown strong performance. Spot gold broke through $2350 per ounce, reaching a new high in nearly two weeks, with intraday gains exceeding 1.7%. The decline of the US dollar and changes in interest rate expectations have jointly driven buying support for gold. The market has now priced the probability of a September 2025 interest rate cut at 67%. The Chicago Mercantile Exchange (CME) FedWatch tool shows that traders' bets on a 25 basis point rate cut in September have significantly increased. 🔚 Summary: Global investors are currently in a game of data and policy expectations. The direction of the US dollar, as the main global pricing currency, is crucial to the foreign exchange market. Next, the upcoming CPI inflation data to be released by the United States on June 12th, along with the minutes of the FOMC meeting, will be the key to market analysis of the Federal Reserve's path and may determine the dominant trend in the foreign exchange market in the coming weeks.
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