USD Outlook: Market Awaits Softer Jobs Report, DXY May Rise Above 98.00

USD Market Stability Despite Tesla Troubles and Trump-Musk Feud

The ongoing public feud between President Trump and Elon Musk has had minimal impact on broad US markets. Despite Tesla’s issues, the S&P 500 dipped only 0.5% yesterday, with futures showing modest gains today. The US Treasury market has remained calm this week, with yields largely unchanged, although upcoming three- and ten-year auctions may refocus attention on US fiscal deficit funding.

Focus on May Nonfarm Payrolls and Potential for Softer Jobs Number

The key event today is the May Nonfarm Payrolls (NFP) report, due at 14:30 CET. While jobs growth has been robust in 2025, investors are watching closely for signs that tariff uncertainties in April have slowed hiring. The Federal Reserve has indicated readiness to act should labor market conditions weaken.

Market “whisper” expectations for jobs growth have dropped from +140,000 to +110,000, with official consensus around +125,000.

Impact of a Softer Jobs Number on the US Dollar and Fed Policy

If the jobs report disappoints, it could trigger broad calls from politicians for near-term rate cuts, increasing market bets on a Fed rate cut at the July 30 meeting. The US Dollar Index (DXY) may rally above the 98.00 level in response to this sentiment.

Related Articles on Tredu:

• US Nonfarm Payrolls: What Traders Should Expect
• Fed Rate Cut Expectations and Market Impact
• US Treasury Auctions and Fiscal Deficit Concerns