Now I have the macro context. Let me write the post.
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- Dollar index jumped 1.17% to 100.1 as hot NFP (172K vs 85K expected) killed remaining rate-cut hopes ahead of next week's Fed meeting
- NZD/USD was the week's biggest loser at -3.07%, dragging the entire commodity bloc lower as gold crashed 4.9%
- ECB rate decision on June 11 and Fed dot plot on June 17 set up a pivotal week for EUR/USD and the dollar complex
The Week in the Dollar
The dollar powered through the 100 level on DXY, closing the week at 100.1 — up 1.17% — after Friday’s May nonfarm payrolls blew past expectations at 172,000 jobs versus an 85,000 consensus, shutting down any lingering rate-cut narrative ahead of the June 16-17 FOMC meeting.
The damage was sharpest in the commodity bloc. NZD/USD fell 3.07% to 0.5798, the worst G10 performer by a wide margin. AUD/USD dropped 1.82% to 0.7050. Both currencies buckled under the combination of dollar strength and a 4.9% weekly collapse in gold to $4,337 — the yellow metal’s worst week in months as real-rate repricing hammered safe-haven demand. Oil moved the other way — WTI surged 3.64% to $90.54 and Brent added 1.13% to $93.09, still elevated on Iran supply-route disruption — but the petro-linked Scandis couldn’t benefit. USD/SEK rallied 2.39% and USD/NOK rose 2.21%, confirming that dollar momentum overwhelmed the crude tailwind.
Key Pair Breakdown
NZD/USD (0.5798, -3.07%): The Kiwi was crushed. The RBNZ’s third consecutive hold at 2.25% left NZD without a rate catalyst, while the bank’s warning that inflation could peak at 4.3% by Q3 raised stagflation fears in the NZ economy. Friday’s hot NFP widened the rate differential further. Price is now testing the 0.58 handle — a break below opens 0.5750.
USD/SEK (9.4601, +2.39%): The krona had a rough week as risk sentiment tilted toward dollar assets. SEK tends to underperform when global equity volatility picks up, and the combination of firmer US data with geopolitical energy uncertainty hit it from both sides. The 9.50 level is the next topside target.
USD/NOK (9.4485, +2.21%): Despite WTI adding 3.64%, the krone couldn’t catch a bid. The dollar’s rate advantage and broader risk-off flows in European FX swamped the oil correlation. NOK and SEK moved almost in lockstep — a sign this was a USD story, not a Scandinavia-specific one.
NZD/JPY (92.923, -1.83%): The cross dropped as NZD weakness bled through even against the yen. With USD/JPY grinding higher to 160.29 (+0.64%), the yen itself wasn’t strong — NZD was simply weaker than everything.
AUD/USD (0.7050, -1.82%): The Aussie tracked NZD lower but with less damage. Copper’s 1.51% slide to $6.264 weighed on AUD through the industrial-metals channel. GBP/AUD rose 1.07% to 1.8931 as sterling held up better against the dollar, widening the cross.
USD/CHF (0.7962, +1.60%): The franc gave back ground as gold’s crash removed safe-haven demand. The move toward 0.80 is worth watching — that level has capped USD/CHF rallies repeatedly this year.
EUR/USD (1.1527, -1.08%): The euro dropped but held above 1.15 despite the broad dollar bid. Markets are pricing a 98% probability of an ECB 25bp hike to 2.25% on June 11, which kept EUR from falling as hard as the commodity bloc. The rate divergence story is live: ECB hiking while the Fed holds creates a floor under EUR/USD, even if the dollar is running.
GBP/AUD (1.8931, +1.07%): Sterling was the relative G10 outperformer — GBP/USD only slipped 0.81% to 1.3336. The cross rallied as AUD weakness did the heavy lifting.
Week Ahead Setup
Next week is stacked. The ECB decides on June 11 with a 25bp hike to 2.25% widely expected — the reaction will hinge on Lagarde’s forward guidance. If she signals a July follow-up, EUR/USD could reclaim 1.16. If she sounds cautious on the growth outlook, the pair drifts toward 1.14.
The Fed meets June 16-17 with updated dot plots and projections. A hold at 3.50-3.75% is locked in (98.7% probability), but the dots will tell the real story — any upward revision to the terminal rate estimate will extend the dollar rally. US CPI drops on June 10, the day before the ECB. A hot print above 3.8% would turbocharge the dollar ahead of both central banks.
NZD/USD at 0.58 is the most technically stretched pair on the board. Watch for a dead-cat bounce toward 0.5850 if risk appetite stabilizes, or a clean break below 0.5780 if the dollar keeps rolling.
Bottom Line
The dollar reasserted control this week on the back of strong jobs data and a gold crash that gutted safe-haven currencies and the commodity bloc alike. Heading into a week with both ECB and Fed decisions plus US CPI, EUR/USD is the pair every desk is watching — the rate-divergence setup between a hiking ECB and a holding Fed will define whether the dollar’s rally has legs or runs into a ceiling at DXY 101.
Read next: FX Markets · How to Read the COT Report · What Is a Bond?
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