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What’s happening: The US dollar recorded gains on Thursday following the release of the latest nonfarm payrolls (NFP) report for June.
What happened: Data released on Thursday showed that the US economy added higher-than-expected jobs in June, triggering speculations of the Federal Reserve delaying interest rate cuts.
The US dollar gained against other safe-haven peers, like the yen and Swiss franc.
Why it matters: The US Labor Department reported that nonfarm payrolls rose by 147,000 in June, up from 144,000 job adds in May. The figure came in significantly higher than market estimates of 110,000.
The US unemployment rate declined to 4.1% in June, from 4.2% in the previous month. This, too, was much better than expectations of an increase to 4.3%. The NFP report was released a day earlier due to the US Independence Day holiday today.
Other strong economic data releases also provided a boost to the US dollar on Thursday. Initial jobless claims fell by 4,000 from the previous week to a reading of 233,000 in the week ending June 28, compared to market expectations of 240,000. The ISM services PMI surged to 50.8 in June, from 49.9 in the previous month, and came in above market projections of 50.5.
Investors widely expect the Fed to keep interest rates unchanged at its upcoming meeting this month.
Republicans in the US House of Representatives passed the tax-cut and spending bill on Thursday, which will now be sent to President Donald Trump for signing it into law.
The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose more than 0.4% to reach 97.18 on Thursday, gaining for the second straight session.
The USD/JPY forex pair jumped more than 0.8% to 144.93, while the CHF/USD rose around 0.4% to 0.7953. The US currency logged gains for the second straight session versus both safe-haven currencies.
The EUR/USD pair fell around 0.3% to 1.1760 on Thursday, recording losses for the second session in a row.
What to watch: Investors will continue monitoring the geopolitical environment as well as the implementation of Trump’s tax cuts and government spending.
With no major economic reports due to be released from the US today, investors will keep an eye on economic data from other key economies.
Context: European stocks closed higher on Thursday, extending gains from the previous session, as investors assessed the latest economic reports.
Details: Data released on Thursday showed that the HCOB Eurozone services PMI rose to 50.5 in June, from 49.7 in the previous month. The figure was revised higher from the preliminary reading of 50 to signal some growth in the region’s services activity.
The HCOB Eurozone composite PMI climbed to 50.6 in June, from May’s reading of 50.2, signalling the strongest expansion in three months.
Investor risk sentiment was supported by the better-than-expected jobs data released by the US.
Banks were among the top performers on Thursday, with shares of Natwest and Lloyds gaining more than 3% rise each.
Semiconductor stocks also received a boost from news of the US lifting restrictions on exports of certain chip designs to China. Shares of Infineon, Siemens, and NXP Semiconductors settled higher on Thursday.
The STOXX Europe 600 Index gained 0.47% to close at 543.76 on Thursday. London’s FTSE 100 rose 0.55% to settle at 8,823.20, while Germany’s DAX 40 and France’s CAC 40 added 0.61% and 0.2%, respectively.
What to watch: Investors await the release of economic data on Eurozone’s PPI (1300 UAE Time) today. Eurozone’s industrial producer prices, which declined by 2.2% in April to record the steepest monthly fall in about a year, are expected to decline by 0.5% in May. Analysts expect the region’s annual industrial producer price inflation to slow to 0.3% in May, from 0.7% in April.
Other Markets: US trading indices closed higher on Thursday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.77%, 0.83% and 0.99%, respectively.
US President Donald Trump said during a call with Russian President Vladimir Putin that he did not see “any progress” in ending the ongoing war with Ukraine. The news sent the RUB/USD pair lower in forex trading this morning.
Philippines’ annual inflation rate rose to 1.4% in June, from 1.3% in the previous month, exerting pressure on the PHP/USD forex pair.
Hong Kong’s S&P Global SAR PMI slipped to 47.8 in June, from 49.0 in the previous month, which sent the HKD/USD pair slightly lower in forex trading this morning.
Japan’s household spending surged by 4.7% year-over-year in May, following a 0.1% decline in the previous month. The latest reading coming in better than market estimates of a 1.2% rise lent support to the JPY/USD forex pair.
South Korea reported a current account surplus of $10.14 billion for May. Despite this being the highest surplus since December 2024, the KRW/USD pair slipped in forex trading this morning.
Italy’s retail sales (1200 UAE Time), UK’s new car sales (1200 UAE Time) and S&P Global construction PMI (1230 UAE Time), India’s bank loan growth (1530 UAE Time), deposit growth (1530 UAE Time) and foreign exchange reserves (1530 UAE Time), Brazil’s PPI (1600 UAE Time) and balance of trade (2200 UAE Time), Mexico’s consumer confidence (1600 UAE Time), as well as Canada’s S&P Global composite PMI (1730 UAE Time) and S&P Global services PMI (1730 UAE Time).
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