Dollar Weakness Intensifies Following Disappointing U.S. Jobs Report
Estimated reading time: 3 minutes
- Weaker-than-expected NFP report triggered a sharp sell-off in the USD.
- EURUSD surged above 1.1710, while DXY fell below 97.70.
- Market anticipates a September Fed rate cut, increasing the likelihood of further USD weakness.
- Risk-on sentiment amplified the impact of the weakening dollar.
- Upcoming economic data and Fed comments will be crucial to watch.
Contents
- Dollar Weakness Intensifies Following Disappointing U.S. Jobs Report
- Market Impact: EURUSD and DXY
- Broader Market Implications
- What to Watch Next
Market Impact: EURUSD and DXY
The U.S. dollar continued its decline following a weaker-than-expected Non-Farm Payrolls (NFP) report released on Friday, September 12, 2025, at 12:30 PM UTC. The disappointing jobs data significantly increased market expectations for a September interest rate cut by the Federal Reserve, triggering a sharp sell-off in the greenback and boosting major currency pairs against it. This development is the single most important FX market event in the last 12 hours.
The impact was most visible in the EURUSD and DXY (U.S. Dollar Index) pairs. While precise NFP figures are not available from the cited sources, it’s clear the report missed consensus expectations, triggering immediate dollar selling. DailyForex reports a 100% market-implied probability of a September Fed rate cut, with probabilities at 80% for October and 73% for December. This sharp increase in expectations for Fed easing significantly reduced the yield appeal of the U.S. dollar.
The EURUSD pair surged, jumping above the 1.1710 level and attempting a breakout beyond the 1.1720 resistance level. Further sustained upward momentum could push it towards the 1.1790–1.1810 range, according to Forex24.Pro and Daily Price Action. Simultaneously, the DXY fell below the 97.70 support level, experiencing an intraday drop of approximately 0.5%, opening the risk of a further decline towards 96.80, as reported by Daily Price Action.
Broader Market Implications
The USD’s weakness was also observed in other major pairs like GBPUSD and NZDUSD, although the cited sources did not report major movements in USDJPY, USDCHF, USDCAD, EMFX, or USD/CNH. The dollar’s decline coincided with record highs in the S&P 500 and a 14-year high in silver prices, suggesting a generally risk-on environment that amplified the effects of the weakening dollar. DailyForex and Daily Price Action both suggest that the move reinforced dovish views on U.S. rate expectations, hinting at a potential lowering of U.S. Treasury yields, though specific yield numbers were not provided. No major G10 or EM central bank announced changes in rates or made significant market-moving statements within this timeframe.
The weaker-than-expected NFP report and the subsequent market reaction highlight the significant influence of U.S. economic data on global currency markets. The anticipation of a Fed rate cut underscores a shift in the prevailing monetary policy narrative, influencing investor sentiment and driving significant shifts in FX trading. The situation underscores the interconnectedness of macroeconomic data, central bank policy, and currency valuations.
What to Watch Next
- Further market reaction to the weak NFP report and the implications for future Fed policy.
- Upcoming economic data releases, particularly inflation figures, that could offer further insights into the Fed’s likely future path.
- Any further comments from Federal Reserve officials regarding their outlook on monetary policy.
FAQ
What is the significance of the NFP report?
