USD Weakens Across Major Pairs as Soft U.S. Jobs Data Dims Fed Rate Hike Hopes

The U.S. dollar retreated broadly against major currencies during the week ended July 3, pressured by weaker-than-expected employment data that raised significant doubts about the Federal Reserve's ability to proceed with imminent interest rate hikes. Key pairs including EUR/USD, GBP/USD, and AUD/USD saw notable dollar weakness as traders repriced Fed tightening expectations. The disappointing jobs report undercut the hawkish narrative that had supported the greenback in prior weeks, with labor market softness suggesting the economy may not be robust enough to absorb further monetary tightening. USD/JPY also declined as risk sentiment shifted and safe-haven flows favored the yen. Market participants are now closely monitoring upcoming Fed commentary and additional economic releases for confirmation of whether the labor market slowdown represents a temporary blip or a more sustained trend. Near-term, the Dollar Index faces support at recent weekly lows, while resistance sits at pre-payrolls levels. Traders should remain cautious as volatility could persist ahead of the next FOMC meeting, with rate expectations continuing to drive price action across all dollar pairs.