The U.S. dollar strengthened against major global currencies on Friday after May’s employment report showed stronger-than-expected job growth, reinforcing the belief that the Federal Reserve may delay cutting interest rates.
According to the Labor Department, U.S. employers added 139,000 jobs in May, a slight slowdown from April’s 147,000, but still exceeding economists’ expectations of 130,000 as forecast in a Reuters poll.
In currency markets, the dollar rose 0.84% to 144.72 against the Japanese yen and gained 0.33% to 0.823 versus the Swiss franc. The greenback extended gains against both safe-haven currencies in the wake of the employment data.
The dollar was also poised to log a second consecutive weekly gain against both the yen and the franc, though it remains down approximately 8% and 9%, respectively, year-to-date.
Eugene Epstein, head of structuring for North America at Moneycorp, noted that the dollar has recently faced pressure due to uncertainties surrounding President Trump’s tariff policies, ongoing trade negotiations, a growing federal deficit, and debate over a tax-and-spending bill currently moving through Congress.
However, Epstein pointed out that markets are beginning to unwind bearish dollar positions following stronger-than-expected economic indicators, including the latest jobs numbers.
“Every bank is forecasting a weaker dollar, and that may be the right call over the long term,” Epstein said. “But positioning had become overstretched, and now we’re seeing a reversal because of solid jobs data and stronger wage growth. Ironically, good economic news now pushes yields higher and delays rate cuts.”
The euro weakened against the dollar after the release of the U.S. jobs report, falling 0.28% to $1.1413. This pullback followed the single currency’s six-week high of $1.1495 on Thursday, which had been driven by European Central Bank President Christine Lagarde’s remarks suggesting the bank was nearing the end of its easing cycle. The euro still looked set to end the week higher versus the dollar.
The U.S. dollar index, which tracks the currency against a basket of peers including the euro and yen, rose 0.38% to 99.05 during the session. However, it remained on pace for a modest weekly decline.
Elsewhere, President Trump and Chinese President Xi Jinping held a rare direct phone call on Thursday, signaling some easing in trade tensions. The dollar gained 0.22% to 7.190 against the offshore Chinese yuan.
In the cryptocurrency market, Bitcoin rose 4.10% to $104,632.06, while Ethereum increased 4.67% to $2,510.82.
