USD Drops Sharply as US Non-Farm Payrolls Turn Negative; USD/CAD Slides

The US dollar sold off broadly after July non-farm payrolls came in at -23K, a dramatic miss against the +80K consensus, marking the first negative print in recent memory. USD/CAD was among the hardest hit as Canadian employment surged by +75.1K versus +15K expected, creating a stark divergence between the two economies. Gold surged $106 to $3,345, reflecting safe-haven demand and reduced rate hike expectations. US 10-year yields declined 2.8 bps to 4.64%, while WTI crude slipped 42 cents amid reports of progress on Iran-Oman Strait of Hormuz negotiations. Fed's Barkin acknowledged a zero-to-modest gain jobs environment, reinforcing the dovish shift. The New York Fed survey showed one-year inflation expectations easing to 3.6% from 3.7%. Reports of US-Canada tariff relief discussions added further downside pressure on USD/CAD. Traders should watch for continued dollar weakness if labor market deterioration persists, with near-term focus on Fed commentary and upcoming CPI data.