The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against a basket of currencies, weakened on Friday (02/05) after briefly moving above the 100.00 level. Despite stronger-than-expected US Nonfarm Payrolls data, the greenback came under pressure from dovish interpretations and emerging trade headlines involving China.

Daily market movers: Not as expected

The US Bureau of Labor Statistics reported that Nonfarm Payrolls rose by 177,000 in April, beating the consensus of 130,000 but lower than the revised 185,000 in March.

The Unemployment Rate remained at 4.2%, while the Labor Force Participation Rate rose slightly to 62.6% from 62.5% in March. Average Hourly Earnings, a key gauge of wage inflation, increased by 3.8% year-over-year, unchanged from the previous month.

Downward revisions to February and March payrolls reduced total job gains by 58,000, softening the surprise gain from April.

China was reportedly open to negotiating tariffs with the Trump administration, which weighed on the US dollar as traders anticipated progress.

The US signed a small minerals deal with Ukraine, though it has limited economic scope and no defense commitments.

Despite the NFP beat, market participants saw April's results as the last potentially strong jobs report before weakness kicks in in June.

The Federal Reserve is still widely expected to cut interest rates in June, with traders pricing in more than 100 basis points of easing by the end of the year. Earlier this week, the ADP jobs report showed private-sector jobs rose by just 62,000, the weakest reading since July 2024.

Q1 GDP showed an annualized contraction of 0.3%, driven by surging imports and weakening domestic demand ahead of tariffs. (Newsmaker23)

Source: FXstreet