The US dollar is sliding toward its largest weekly decline since April, and crypto markets are throwing a quiet party in response.
After the Bureau of Labor Statistics reported that the US economy added just 57,000 nonfarm jobs in June, well below market expectations, the dollar index (DXY) tumbled toward two-week lows. The weak labor print effectively took the air out of rate-hike expectations that had been building since mid-June, when hawkish signals from Federal Reserve Chair Kevin Warsh pushed the DXY to 13-month highs near 101.40-101.80.
The jobs miss and what it means for rates
The CME FedWatch tool tells the story clearly. Before the July 2 report, markets were pricing in roughly 65% odds of a September rate hike. After the data dropped, those odds fell to around 50%.
The USD/JPY pair eased from multi-year highs near 162, offering some relief to the Japanese yen, which had been under relentless pressure from the dollar’s strength throughout June.
