US Jobs Report Preview: June NFP Set to Reveal Tepid Hiring Momentum as Rate Cut Bets Grow

Key Takeaways:

• June Nonfarm Payrolls (NFP) expected to rise by just 110K, down from May’s 139K.
• Unemployment Rate projected to edge up to 4.3%.
• US Dollar remains under pressure amid growing Fed rate cut expectations.

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Markets brace for a pivotal US labor market update as the June Nonfarm Payrolls report is due Thursday at 12:30 GMT. The data could become a key catalyst for the Federal Reserve’s next policy move and has the potential to drive sharp moves in the US Dollar (USD), which currently trades near multi-year lows.

What to Expect from the June Jobs Data?

Consensus estimates suggest Nonfarm Payrolls rose by 110,000 in June, reflecting a cooling in the labor market following May’s gain of 139,000. The Unemployment Rate is forecast to tick up to 4.3%, while Average Hourly Earnings are seen holding steady at a 3.9% annual increase.

Analysts at TD Securities expect 125,000 new jobs to be added in June, flagging slowing hiring trends based on Homebase metrics and rising continuing jobless claims. They also anticipate wage growth to slow to 0.2% month-over-month, suggesting subdued inflationary pressure from the labor market.

Why This NFP Matters More Than Usual

With Fed Chair Jerome Powell reaffirming a data-driven stance at the ECB’s Sintra conference, this report takes on added importance. Powell stated, “We’re prepared to wait while the economy holds up, but no meeting is off the table.” Traders have since raised bets on a rate cut as early as July, pricing in 64 basis points of easing by year-end.

Mixed signals from recent data have left markets guessing. While JOLTS job openings surged to 7.77 million and ISM Manufacturing PMI improved to 49.0, ADP private payrolls unexpectedly fell by 33,000, marking the first decline in over a year.

How Could EUR/USD React?

The EUR/USD pair currently hovers near 1.1800 after hitting 1.1830—its highest level since 2021. However, with overbought technical conditions setting in, any upside surprise in NFP could prompt a corrective dip.

According to FXStreet’s Dhwani Mehta, “EUR/USD may face pressure toward the 21-day SMA at 1.1568 if a retracement unfolds. A push above 1.1909 could renew the bullish momentum and target 1.2000 next.”

Possible Scenarios Based on the Jobs Data

• Weak Report (NFP < 100K, UE > 4.3%): Increases chances of a July rate cut; USD could slump further; EUR/USD likely to rally.
• Strong Report (NFP > 150K, UE ≤ 4.2%): Eases pressure on the Fed to cut soon; USD may stage a rebound; Gold and EUR/USD could see profit-taking.

Final Thoughts

As Fed officials signal caution and uncertainty surrounds US fiscal policies—especially Trump’s new spending plan—Thursday’s labor market print could reset market sentiment. A weaker-than-expected report might trigger fresh USD selling and accelerate policy easing bets, while any signs of resilience could stall the Dollar’s downward spiral.

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