- US Dollar Index ends two-day uptrend, on track for second weekly loss despite NFP boost.
- US NFP and ISM Services beat forecasts, Unemployment Rate dips, but wage growth eased.
- US growth fears, uncertainty over Trump’s “Big, Beautiful Bill” previously dragged DXY to its lowest since February 2022.
- US holiday and mixed trade-political news weigh on DXY and market sentiment, testing ETH and XRP bulls as well.
US Dollar Index (DXY) edged lower to around 97.00 during Friday’s European session, pulling back after a two-day rebound from its February 2022 low. This mild retreat came amid thin holiday trading for the US Independence Day and a mix of trade and political developments that added to market uncertainty.
On Thursday, the DXY posted its biggest daily gain in two weeks, fueled by stronger-than-expected US employment data. The US Bureau of Labor Statistics (BLS) reported that June’s Nonfarm Payrolls (NFP) rose by 147K, beating market forecasts of 110K and a revised 144K prior. The surprise came after a weaker mid-week ADP Employment Change, typically viewed as a leading indicator for NFP. In addition, the Unemployment Rate fell to 4.1% from three straight months at 4.2%, beating expectations of 4.3%. The Labor Force Participation Rate also ticked up to 62.3% from 62.2%, while Weekly Jobless Claims dropped to 233K from 237K, better than the 240K consensus.
However, wage growth—measured by Average Hourly Earnings—cooled, coming in at 3.7% year-over-year and 0.2% month-over-month, compared to previous readings of 3.8% and 0.4%, respectively. Separately, the US ISM Services PMI for June rose to 50.8, beating both the expected 50.5 and the prior figure of 49.8, offering further support to the dollar’s Thursday surge.
The mostly upbeat US data joined Fed Chair Powell’s early-week support for a patient rate stance despite political pressure to cut and helped the US Dollar remain firm on Thursday.
On the political front, the US House of Representatives passed President Donald Trump’s “One Big Beautiful Bill” (OBBB) after a Senate approval and some last-minute drama. The bill was then sent back to the president for final signing. Additionally, the House declared the week of July 14 as “Crypto Week” and signaled plans to discuss three major legislative acts: the CLARITY Act, the Anti-CBDC Surveillance State Act, and the Senate’s GENIUS Act, boosting sentiment across the digital asset space.
Trade and geopolitical headlines also influenced market tone. US-China trade talks showed signs of progress, with officials from both sides exchanging positive remarks and pledging to act on earlier agreements. However, Trump kept markets on edge by threatening to impose new global tariffs starting August 1. Meanwhile, Treasury Secretary Bessent suggested a possible 10% reciprocal tax across 100 countries and dismissed recession concerns, forecasting stronger-than-expected US growth despite the fiscal deficit.
Global tensions eased slightly, with Hamas reportedly open to a 60-day ceasefire, Russian President Vladimir Putin expressing willingness for talks with Ukraine, and Ukrainian President Volodymyr Zelenskyy showing readiness for a summit to pursue peace.
Against this complex backdrop, the DXY surged on Thursday but trimmed gains on Friday amid a mix of cautious optimism and unresolved concerns. Earlier in the week, uncertainty around Trump’s bill and mixed US economic signals had pushed the dollar index to its lowest level since February 2022.
Despite the DXY’s soft tone and path toward a second weekly loss, the broader crypto market held firm. Both Ethereum (ETH/USD) and Ripple (XRP/USD) appeared poised for their second straight weekly gain, even after snapping a two-day rally by mid-Friday.
Source: Tradingview
The US Dollar’s weakness is fueling optimism in the crypto market, keeping XRP and ETH bulls hopeful. Ripple (XRP/USD) finds extra support from its federal banking bid, while Ethereum (ETH/USD) benefits from growing institutional interest, with US Spot ETH ETFs recording their eighth straight week of inflows.
Forward Guidance
Looking ahead, Friday’s trading may stay muted with US markets closed and a light global data calendar, featuring only German factory orders, EU PPI, and speeches from mid-tier ECB and BoE officials. The spotlight shifts to next week, which brings major catalysts including China’s inflation report, the US FOMC Minutes, policy decisions from the Reserve Bank of Australia (RBA) and Reserve Bank of New Zealand (RBNZ), Canada’s jobs report, and the UK’s data dump.
Crypto traders are likely to keep an eye on “Crypto Week” in the US and may continue cheering the softer US Dollar—unless the FOMC Minutes surprise with a hawkish tone.
Technically, Ethereum (ETH/USD) looks set to hold above the 200-day Simple Moving Average (SMA) near $2,509, and could aim for the $2,900 resistance. Ripple (XRP/USD), however, needs a decisive break above the 200-day SMA at $2.27 to gain bullish momentum toward the May peak of $2.66; failure to do so could lead to a dip back toward $2.00.
In summary, while a weaker US Dollar may continue to support crypto bulls, Ethereum appears better positioned to maintain its rally, whereas Ripple still needs stronger confirmation to break higher.
