01.08.2025 18:57

The euro experienced a dramatic surge against the US dollar following the release of disappointing US Nonfarm Payroll figures for July. This unexpected rebound saw the EUR/USD exchange rate jump over 150 pips, climbing from a low of 1.1391 to a high of 1.1556. The market reaction was swift and significant, reversing a week of downward pressure on the euro.

The unexpectedly weak jobs report revealed that the US economy added only 73,000 jobs in July, falling far short of the anticipated 110,000. Adding to the negative sentiment, the previous month's job growth was revised downwards considerably, from 147,000 to just 14,000, indicating a more significant weakening of the labor market than initially perceived. This underwhelming employment data contrasted sharply with recent robust economic indicators and the Federal Reserve's hawkish stance, catching investors off guard.

While the unemployment rate rose slightly to 4.2%, meeting market predictions, the overall picture painted by the report was one of decelerating job growth. This, coupled with stable wage growth – a mixed indicator for underlying inflation – fueled speculation of a potential rate cut by the Federal Reserve. The result was widespread dollar selling, lifting the euro from its lowest point since mid-June.

The US Dollar Index (DXY), a key indicator of the dollar's value against major currencies, consequently retreated from a two-month high of 100.26 to 99.3, reflecting the market's shift in sentiment. The significant movement in the EUR/USD pair, nearing a 1.20% daily increase during American trading hours, underscores the substantial impact of the July NFP report on global currency markets. The disappointing jobs data significantly altered expectations surrounding future Federal Reserve policy, provoking the dramatic shift in the euro’s value. The event highlights the powerful influence of economic data releases on currency trading.