Weak NFP Eases Rate Hike Fears, Apple Surges on New iPhone Plans

The Euro strengthened against the US Dollar on Thursday, with EUR/USD climbing to a nine-day high after weaker-than-expected US Nonfarm Payrolls (NFP) data fueled expectations that the Federal Reserve may be less aggressive with future interest rate increases.

According to the US Bureau of Labor Statistics, the US economy added just 57,000 jobs in June, well below market expectations of 110,000. In addition, May's payroll figure was revised lower to 129,000 from the previously reported 172,000, reinforcing signs of a cooling labor market. Despite the weak headline payrolls number, the unemployment rate unexpectedly edged down to 4.2% from 4.3%, while average hourly earnings increased 0.3% month-over-month and 3.5% year-over-year, matching market forecasts.

The US Dollar had already been under pressure earlier in the session amid speculation that Japanese authorities may have intervened in the foreign exchange market after USD/JPY surged to a 40-year high earlier this week. Selling accelerated after the NFP report, pushing the US Dollar Index (DXY) to its lowest level in two weeks. However, the Dollar's losses could remain contained as the broader employment report did little to alter the Fed's inflation outlook.

Meanwhile, softer-than-expected Eurozone inflation data released earlier this week has reduced expectations for another European Central Bank rate hike this year, limiting the Euro's longer-term upside.

Gold prices extended their recovery for a third consecutive session on Friday, with XAU/USD climbing toward the $4,200 level during Asian trading as softer-than-expected US employment data weighed on the US Dollar and boosted demand for the non-yielding precious metal. The metal has now rebounded from its lowest level since November 2025 and is on track to post its first weekly gain in five weeks.

The weaker labor market data prompted investors to scale back expectations for further Federal Reserve tightening, supporting Gold by reducing the opportunity cost of holding non-interest-bearing assets. Traders also took comfort from easing inflation pressures following the recent decline in crude oil prices, leading markets to dial back expectations for future rate increases. As a result, the US Dollar remained under pressure near a two-week low, providing additional support for bullion.

Despite the bullish backdrop for Gold, lingering geopolitical risks could prevent a sharper decline in the Dollar and limit further gains in the precious metal. Reports indicated that US officials were concerned Israel could target senior Iranian negotiators during indirect talks, raising fears that such an action could derail diplomatic efforts and reignite regional tensions. Meanwhile, Iran's military warned that any US involvement in the Strait of Hormuz would trigger a swift and decisive response, keeping geopolitical uncertainty elevated.

Looking ahead, trading activity is likely to remain subdued as US financial markets are closed for the Independence Day holiday.

Oil prices traded modestly higher on Friday ahead of the US Independence Day holiday, with investors cautiously optimistic that diplomatic efforts between the United States and Iran could help preserve stability in the Middle East.

Despite Friday's gains, both benchmarks touched their lowest levels since before the US-Israeli conflict involving Iran escalated in late February during the previous session. Market sentiment remained cautiously constructive as traders balanced hopes that the ceasefire and diplomatic efforts would hold against lingering geopolitical uncertainty.

Attention also remained focused on oil supply flows through the Strait of Hormuz, a vital shipping route that previously handled around one-fifth of global oil and liquefied natural gas exports. With maritime traffic gradually normalizing, several producers have moved to increase exports.

Kuwait boosted crude production to approximately 1.65 million barrels per day in June, up sharply from 580,000 barrels per day in May, according to sources familiar with the matter. The increase followed the interim peace agreement between the United States and Iran and allowed the OPEC producer to expand exports.

Meanwhile, at least five supertankers carrying an estimated 10 million barrels of Saudi crude have successfully transited the Strait of Hormuz. Saudi Aramco has also reportedly shifted to spot pricing for some Asian cargoes to accelerate sales, reflecting improving confidence in regional shipping conditions.

US stocks ended Thursday's session on a mixed note, with weakness in technology and semiconductor shares offsetting optimism generated by a softer-than-expected June employment report that reduced expectations of further Federal Reserve rate hikes. Despite the uneven performance, Wall Street finished the holiday-shortened week with solid gains ahead of the Independence Day break.

Investor attention centered on the June US employment report, which showed the economy added just 57,000 nonfarm payrolls, well below expectations of 110,000 and down from May's revised figure of 129,000. Employment gains were concentrated in professional and business services, healthcare, and social assistance, while leisure and hospitality payrolls declined.

The weaker payrolls report prompted investors to scale back expectations for additional Federal Reserve tightening. With inflation pressures easing alongside lower oil prices following the recent US-Iran interim peace agreement, markets increasingly expect the Fed to leave interest rates unchanged rather than deliver another hike.

Concerns were also fueled by reports that Meta Platforms is exploring ways to monetize excess AI computing capacity by offering it to external customers, raising speculation that major technology companies may begin moderating the rapid pace of infrastructure investment that has driven demand for AI chips.

Tesla also weighed on the technology sector despite reporting record quarterly vehicle deliveries that exceeded market expectations. After rallying strongly ahead of the results, the stock came under profit-taking pressure as investors locked in gains.

Looking ahead, investors will continue to monitor incoming inflation and labor market data for further clues on the Federal Reserve's policy path, while attention will also remain focused on developments in the AI sector following its remarkable rally during the first half of the year.