Forex week in review 27/2026: a 57,000 payrolls miss and a holiday-shortened week cool the dollar

The short version: the dollar's three-week rally stopped, and it stopped because of one number. June nonfarm payrolls, released on Thursday 2 July because Friday was the Independence Day holiday, showed just 57,000 new jobs against forecasts of about 110,000. Before that, the yen had slid to its weakest level against the dollar since 1986. By Friday's thin close, EUR/USD was up 0.44%, GBP/USD up 1.17% and USD/JPY down 0.27% on the week. Sterling's gain started on Monday, when Andy Burnham promised to keep the UK's fiscal rules.

Weekly figures are from Yahoo Finance hourly data, measured from the Sunday evening open to the Friday close at 5pm New York time. Friday 3 July was a US market holiday, so the last session of the week was unusually quiet. RTTNews's own closing figures for 3 July (EUR/USD 1.1437, AUD/USD 0.6941, USD/JPY 161.38) are within a few pips of ours.

Where we left off

Over the previous two weeks the dollar had rallied on the Federal Reserve's hawkish projections, with the Dollar Index hitting 101.80, its highest in just over a year. Gold had fallen below $4,000 for the first time since November. Keir Starmer had announced his resignation, and Andy Burnham was the clear favourite to replace him. If you are catching up, start with forex week in review, 22–26 June 2026.

The market went into this week with about 30 basis points of Fed tightening priced by the end of 2026, according to FXStreet, citing Prime Terminal data. That pricing was the thing at risk.

Monday 29 June: Burnham steadies the pound

Andy Burnham said he would adhere to the fiscal rules set by Chancellor Rachel Reeves and stick to Labour's 2024 manifesto, and that he would not name appointments until the leadership process was over. For a market that had worried about higher spending and more gilt issuance, that was the reassurance it wanted. GBP/USD rose 0.40% on the day to around 1.3244, after a low of 1.3191, according to FXStreet. The Dollar Index slipped 0.20% to 101.15.

The ECB's annual Forum on Central Banking also opened in Sintra, Portugal, with both ECB President Christine Lagarde and Fed Chair Kevin Warsh on the programme.

Tuesday 30 June and Wednesday 1 July: the yen at a 40-year low

USD/JPY pushed above 162 on Tuesday. On Tuesday, Finance Minister Satsuki Katayama said Japan would act on currencies as needed and that "taking decisive steps is included" after a recent call with US finance officials.

In Asian trading on Wednesday the pair touched 162.77, the yen's weakest level against the dollar since 1986, according to LSEG data cited in a Reuters report. Analysts at HSBC said they still thought the Ministry of Finance would intervene at some point. The background matters: Japan had spent a record 11.73 trillion yen (about $72.5 billion) on intervention between 28 April and 27 May, and the relief had lasted only a few weeks. Japan's foreign exchange reserves stood at about $1.09 trillion, so there was no shortage of ammunition.

Why was the yen so weak when the Bank of Japan had raised rates to 1% only two weeks earlier? Because the gap between US and Japanese rates was still several percentage points, and the Fed had just signalled it might widen further. Traders who borrow in yen to hold higher-yielding currencies earn that difference every night, which is the carry trade. Our guide to swap and overnight financing explains how that daily payment works and why it can keep a trend going for a long time.

Eurozone inflation undershoots

On Wednesday, Eurostat's flash estimate showed eurozone HICP inflation at 2.8% in June, down from 3.2% in May. FXStreet's preview had the consensus at 3.0%. Core inflation (excluding energy, food, alcohol and tobacco) eased to 2.4% from 2.6%, energy inflation fell to 8.7% from 10.8% and services to 3.2% from 3.5%.

Lower-than-expected inflation would normally weaken a currency, because it reduces the chance of more rate hikes. The euro dipped but did not collapse. The ECB had already hiked in June and the dollar side of the pair was about to matter more.

Warsh at Sintra

Fed Chair Kevin Warsh told the Sintra panel that the Fed was determined to restore price stability, even if that meant defying President Trump's calls for lower rates, according to NPR. He also said US inflation expectations had eased over the past month, which Trading Economics characterised as signalling no urgency to raise rates. That second message was the one currency traders heard.

By Wednesday, fed funds futures priced 36 basis points of hikes by the end of the year, according to Commerzbank.

Thursday 2 July: payrolls on a Thursday

Independence Day falls on Saturday 4 July in 2026, so the federal holiday was observed on Friday 3 July. That moved the jobs report forward to Thursday at 8:30am New York time.

The numbers, from the Bureau of Labor Statistics:

• Payrolls rose 57,000 in June. The consensus was about 110,000.
• April was revised down to 148,000 from 179,000, and May to 129,000 from 172,000, a combined 74,000 fewer jobs than previously reported.
• The unemployment rate fell to 4.2% from 4.3%.
• The participation rate dropped 0.3 percentage points to 61.5%.
• Average hourly earnings rose 0.3% on the month and 3.5% on the year.

The unemployment rate falling on a weak report is the kind of detail that confuses new traders. NPR's coverage explained it: more than 700,000 people left the labour force in June, and people who are not looking for work are not counted as unemployed. Leisure and hospitality alone shed 61,000 jobs. So the lower jobless rate was not a sign of strength.

The reaction

Before the report, investors saw about a one-in-three chance of a Fed hike at the July meeting, according to NPR. Afterwards it fell below one in five. Commerzbank noted that fed funds futures now priced 30 basis points of hikes by year-end, down from 36 on Wednesday.

The dollar fell across the board. USD/JPY dropped about 150 pips to around 161.10, helped by the intervention talk. On Yahoo Finance data, the Dollar Index lost about half a percent on the day. Gold, which had been as low as $3,955 in futures trading on Tuesday, rallied.

Our guide to how economic data moves forex explains why the surprise against consensus, not the number itself, drives the move. A 57,000 print in a world where 110,000 was expected is a 53,000 miss, and the downward revisions made it worse.

Friday 3 July: a holiday session

US exchanges and bond markets were closed. Spot forex still traded, as it does on every weekday, but with New York largely absent the session was thin. Trading Economics reported that traders had been watching for possible Japanese intervention before the US holiday, on the logic that intervening into thin liquidity gives a bigger bang for the buck.

It did not happen. Japan's Ministry of Finance later published data showing that it spent nothing on intervention between 29 June and 29 July. The 150-pip fall in USD/JPY on Thursday was the market, not the government.

That is worth pausing on. On Thursday afternoon, plenty of commentary blamed intervention for the yen's jump. The official data showed otherwise. Rumour moves prices too, but it is worth waiting for the facts before building a view on them.

How to tell intervention from a market move

Japan's Ministry of Finance publishes the total amount it has spent on intervention once a month, covering a period that ends near the end of the month, and releases the day-by-day breakdown later, each quarter. So in real time, traders have to infer. The usual clues are a sudden move of several big figures in minutes with no data release or headline behind it, a move that happens in a quiet period (late New York or early Asia), and officials who decline to confirm or deny. Thursday's fall did not fit that pattern: it came straight after a major US data release that explained it on its own, and it was about 150 pips rather than several yen.

The verbal ladder matters too. Officials tend to escalate their language step by step, from saying they are watching moves closely to warning that decisive steps are an option. Katayama's comments this week sat high on that ladder, which is why the market was nervous. None of that tells you when, or whether, a government will act, and positions that rely on guessing it can be hit hard either way.

Pair by pair

EUR/USD: +0.44%

A softer eurozone inflation print was outweighed by an even softer US jobs report. The pair recovered from a low of 1.1366 to close at 1.1440.

GBP/USD: +1.17%

Burnham's fiscal pledge on Monday removed one source of risk, and the payrolls miss removed another. EUR/GBP fell 0.72%, which confirms the move was not only about the dollar. The pair traded as high as 1.3385.

USD/JPY: -0.27%

A week with a 237-pip range (from 162.84 to 160.47) that ended only 44 pips lower. The pair set a 40-year high for the dollar on Wednesday and then reversed on the jobs data. A range like that is a reminder that the weekly change hides a lot of risk.

USD/CHF: -0.91%

The franc gained as US hike pricing faded. It had lost 1.63% to the dollar two weeks earlier on the Fed and the SNB's intervention talk; this week reversed more than half of that.

NZD/USD: +1.24%

The kiwi had been the weakest major for two weeks running. When a heavily sold currency gets a reason to bounce, it often bounces hard, because traders who were short buy back their positions. The Australian dollar rose 0.65%.

Gold

Futures fell to $3,955.40 on Tuesday, their lowest level of this run, then recovered after payrolls. Commerzbank noted gold rallied as the dollar weakened. Because US futures markets were shut for the holiday on Friday, we have not quoted a weekly close.

A worked example: what a 150-pip yen move is worth

USD/JPY is quoted in yen, so its pip value is in yen too. This example uses round numbers and is illustrative only.

• One standard lot of USD/JPY is $100,000. A pip is 0.01 yen, so each pip is worth 1,000 yen.
• At a rate of 161, 1,000 yen is about $6.21. So one pip on one lot is worth roughly $6.21, not the $10 you get on EUR/USD.
• Thursday's fall of about 150 pips was worth around 150,000 yen, or roughly $930, per standard lot.
• Under ESMA's 30:1 retail limit on major pairs, the margin for one lot of USD/JPY is about $3,333 (100,000 ÷ 30). A 150-pip move against you is about 28% of that margin, in a few hours.

Our guides to what a pip is and lot sizes and position sizing show how to do this calculation for any pair. The important habit is to calculate it before the event, not after. Most retail CFD accounts lose money, typically 61–89% according to broker disclosures, and leverage magnifies losses on exactly this kind of release.

What this week teaches

1. Holidays move the calendar, not just the market

The US jobs report usually comes out on the first Friday of the month. This month it came out on a Thursday, because Friday was a holiday. If you rely on habit rather than an economic calendar, you can be caught holding a position into a release you did not know was coming.

2. Thin liquidity is a risk in itself

On holiday sessions, fewer banks are quoting prices, so spreads can widen and price can jump on small orders. That is especially true when a central bank is threatening to intervene. Our guide to forex market hours and sessions covers holiday trading and the daily rollover.

3. Read past the headline number

The unemployment rate fell. The jobs report was still weak. Revisions, participation and the sector breakdown told the real story. The same applies to the eurozone: headline inflation fell more than core.

4. Positioning makes reversals sharper

The dollar had been bought for three weeks and the yen sold for months. When the data turned, the move was faster than the size of the miss alone would suggest, because a lot of traders were on the same side. This is one of the reasons we keep linking to why most retail CFD traders lose: crowded trades and leverage together are a common way accounts get hurt.

Scheduled next week (6–10 July)

These are scheduled events only; we do not forecast how they will affect prices.

• Midweek: NATO leaders' summit in Ankara, Turkey, attended by President Trump.
• Wednesday 8 July: Reserve Bank of New Zealand policy decision, and the minutes of the Fed's June meeting in the US afternoon.
• Thursday 9 July: nominations open in the Labour leadership contest.
• During the week: the account of the ECB's June policy meeting.

The following recap: forex week in review, 6–10 July 2026.

Sources

• US Bureau of Labor Statistics: The Employment Situation, June 2026
• NPR via KUNC: U.S. job market slows in June
• ForexFundamentals: Nonfarm payrolls, released 2 July 2026
• Commerzbank via TMGM: Softer jobs data supports yen
• MarketScreener: Yen hits fresh 40-year low versus dollar
• Trading Economics: Yen languishes at 40-year low
• Japan Ministry of Finance: Foreign exchange intervention, 29 June to 29 July 2026
• Eurostat: Euro area annual inflation down to 2.8% (flash, June 2026)
• FXStreet: EUR/USD weekly forecast, US employment and central bank leaders take the stage
• FXStreet: British pound rises as Burnham fiscal pledge calms markets
• RTTNews: Dollar Index edges up amidst rate cues, war cries (for 3 July closing levels)
• Yahoo Finance: EUR/USD historical data (also GBPUSD=X, JPY=X, CHF=X, NZDUSD=X, AUDUSD=X, GC=F, DX-Y.NYB)