Weak US Payrolls Trigger Fed Rate Cut Bets, Dollar Slides to Multi-Week Lows

Weaker-than-expected U.S. nonfarm payrolls this week triggered a sharp downward revision in Federal Reserve rate hike expectations, weighing heavily on the Dollar across major currency pairs. EUR/USD is poised for its first weekly gain in three weeks, while GBP/USD remains capped below 1.3400 despite higher prices. Gold has snapped a multi-week losing streak as the tightening premium supporting the Dollar gets stripped away. Traders will closely watch next week's FOMC minutes for signals on whether Fed Chair Kevin Warsh's committee might pivot from its current hold back toward hikes.

Geopolitical tensions provide intermittent counterweight to the Dollar's decline. Renewed U.S.-Iran hostilities and Israeli strikes on Lebanon are reviving safe-haven demand that periodically cuts against the broader bearish Dollar narrative while reinforcing underlying bids for Gold and traditional safe assets.