Dollar hits two-week lows as rate-hike bets fade, boosting Bitcoin and Ether
In brief
- June nonfarm jobs missed expectations at 57,000, shocking markets and reshaping Fed outlook
- Dollar index fell to two-week lows; September rate-hike odds dropped from 65% to 50%
- Bitcoin surged 6.5% to $61,600; Ether jumped 11.5% on risk-on sentiment
Jobs Miss Cools Fed Hawkishness
The June jobs report landed as a shock to markets. Before the July 2 release, traders were pricing in roughly 65% odds of a September rate hike. That confidence evaporated quickly. After the data dropped, those odds fell to around 50%, a dramatic repricing in less than a day.
The shift reflects a broader softening in economic momentum. The dollar index (DXY) tumbled toward two-week lows as investors unwound hawkish positions. This reversal came after weeks of dollar strength. Federal Reserve Chair Kevin Warsh had been striking an aggressive tone on inflation in mid-June, and markets had responded by pushing the dollar index to 13-month highs in the 101.40–101.80 range. The jobs miss erased those gains in a matter of hours.
Crypto Responds to Lower Rate-Hike Odds
Capital rotated sharply back into risk assets. The largest cryptocurrency hit a low of $57,750 on Tuesday, when rate-hike anxiety was still dominating the narrative. By Friday, Bitcoin recovered to $61,600, a 6.5% gain from its weekly low.
Ether's move was even sharper. The second-largest crypto asset surged 11.5% from its Tuesday lows over the same period, outpacing Bitcoin's recovery. Altcoins including Cardano, Zcash, and Dash all posted gains following the jobs report, suggesting broad-based appetite for risk-on positioning.
The dollar's weakness extended across currency pairs. The USD/JPY pair eased from multi-year highs near 162 as carry-trade positioning unwound. The US dollar is sliding toward its largest weekly decline since April, a reminder of how tightly macro conditions drive crypto sentiment and price action.
