--- title: 'Why EURUSD Spiked: Jobs Report Shakes Fed Rate Hopes' source: 'https://youtube.com/watch?v=kOGl4a6cAAg' video_id: 'kOGl4a6cAAg' date: 2026-08-11 duration_sec: 403 channel: 'The Moving Average' --- # Why EURUSD Spiked: Jobs Report Shakes Fed Rate Hopes > Source: [Why EURUSD Spiked: Jobs Report Shakes Fed Rate Hopes](https://youtube.com/watch?v=kOGl4a6cAAg) ## Summary This video breaks down the dramatic market moves triggered by Friday's U.S. non-farm payroll (NFP) report, which showed a loss of 23,000 jobs versus an expected gain of 80,000. The presenter explains how this shifted Federal Reserve rate hike expectations, driving EURUSD higher, boosting gold, and rallying stocks, while also covering oil's volatility tied to Iran and the Strait of Hormuz. The video concludes with a preview of next week's CPI and PPI reports as the next key catalysts. ### Key Points - **EURUSD spike explained** [00:00] — EURUSD shot up on Friday because the U.S. jobs report was far worse than expected, not due to a broker error or a massive accidental buy order. - **NFP report details** [00:39] — Non-farm payrolls showed the U.S. economy lost 23,000 jobs versus an expected gain of 80,000, a swing of over 100,000 jobs. Previous months' numbers were also revised lower. - **Market focus on interest rates** [01:30] — The market is obsessed with interest rates. Before the report, there was a real possibility of a September rate hike, which is supportive for the dollar. - **Rate hike probability drops** [02:03] — After the jobs report, the probability of a September rate hike fell from roughly 57% to around 44%, as a weakening labor market makes rate hikes harder to justify. - **EURUSD move explained** [02:17] — EURUSD is a battle between the euro and dollar. Weaker dollar expectations led to dollar selling, pushing EURUSD from roughly 1.152 to 1.157, with the euro up about 0.4% on the day. - **Gold rallies** [03:04] — Gold rose to its highest level in about seven weeks, trading near $4,400 an ounce, as lower rate expectations made holding gold more attractive. - **Stocks rally on bad news** [03:27] — Despite weak jobs data, U.S. stocks rallied on Friday, with the S&P 500 finishing near its all-time high, because markets are pricing what the Fed might do next, not just today's data. - **Oil volatility from Iran** [03:55] — Oil collapsed over 5% on diplomatic progress in the Strait of Hormuz, then jumped almost 4% after reports of potential Iranian restrictions on U.S. and Israeli vessels. Brent closed around $83. - **Next week's CPI report** [05:12] — Wednesday's U.S. CPI report (expected ~3.4% YoY) is the key event. Hotter CPI could revive rate hike odds and strengthen the dollar; cooler CPI could weaken it further. - **Trading advice for EURUSD** [06:14] — Don't assume the euro is suddenly strong; Friday's move was primarily about dollar weakness. Watch Thursday's PPI data for another inflation read. ### Conclusion Friday's jobs report was a major catalyst, but the story is far from over. Next week's CPI and PPI reports will be crucial in determining whether the dollar's weakness continues or reverses, making them the key events to watch. ## Transcript Now, if you looked at your charts on Friday and suddenly saw that EURUSD shot straight into the air, your broker was not broken, and no, someone didn't accidentally click the buy button with a billion-dollar account. The U.S. released one of the biggest economic reports of the month, and the numbers were way worse than people expected. And what's interesting is that that one report basically changed what the market thinks the Federal Reserve will do next. So let's talk about what happened this week, why Eurousd suddenly shot up to the moon, and probably more importantly, what we need to watch for next week, because the story isn't over yet. Now let's start with what actually happened. Friday was non-farm payroll, also known as NFP. Basically, once a month we get a report showing us how many jobs the U.S. economy added or lost. Now economists were expecting the U.S. to add around 80,000 jobs. So plus 80,000 was the expected number. Instead, the economy lost 23,000. Expectation plus 80,000, actual result minus 23,000. That's more than 100,000 job difference between what the market was expecting and what actually happened. And the previous numbers were revised lower as well. Now, normally you'd think, okay, bad economic news, stocks go up, dollar goes down, everybody panics. But that's not exactly what happened because right now the market is obsessed with one thing, and that's interest rates. The Federal Reserve has been dealing with stubborn inflation. And before this report there was a very real possibility that they could raise interest rates again in September Several Fed officials actually spent the week talking about possibility of higher rates getting inflation under control And generally speaking the U interest rates are supportive for the dollar. But then Friday's jobs reports came out, and suddenly the market had a huge problem. Because if the labor market is starting to weaken, raising interest rates becomes a hell of a lot harder to justify. So traders immediately started reducing their expectations for the September rate hike. And before the jobs report, markets were pricing roughly 57% probability of a September rate hike. And after the report, that dropped to around 44%. That's where the move on EURUSD comes from. Remember, EURUSD is basically a battle between the euro and the dollar. If the dollar gets weaker while everything else stays relatively equal, Euro USD goes up. And that's exactly what happened. The jobs reports come out. Traders think the Fed might not be able to raise rates. Expectations for the U.S. rates fall. The dollar gets sold. And Euro USD shoots from roughly 1.152 to 1.157 almost immediately. By Friday, the Euro was around 0.4% higher against the dollar and was headed for a weekly gain as well. But here's where this gets more interesting because the dollar wasn't the only thing that moved. Gold absolutely loved this report. Gold pushed itself to the highest level in around seven weeks, trading close to $4,400 an ounce. Why? Pretty much the opposite side of the US dollar. If traders think the Fed is less likely to raise interest rates, bond yields can fall, the dollar can weaken, and then holding something like gold becomes relatively more attractive So gold finished up the week really strong And then we have the stock market This is where the whole bad news is good news thing happens again You think losing jobs would be terrible for stocks. Economically, yeah, obviously it's something that you don't want to see. The markets aren't just pricing what's happening today. They're pricing what the Federal Reserve might do next. This is all an anticipation game. If the economy cools enough that the Fed doesn't have to keep pushing interest rates higher, that's potentially good news for companies. And despite the weak jobs report, the U.S. stock markets rallied on Friday, while the S&P 500 finished a very strong week, pretty close to its all-time high. But there's another market that we have to talk about, and that's oil. Because oil has been completely insane lately, and unlike the jobs report, this story has almost nothing to do with economic data. It's about Iran and the Strait of Hormuz. Earlier this week, oil collapsed more than 5% after reports suggested that progress has been made towards diplomatic agreement that could improve shipping in the Strait of Hormuz. Brent oil dropped all the way down to $79 a barrel. And then on Thursday, everything changed again. Reports came out that an Iranian parliament committee was considering legislation that could restrict U.S. and Israeli vessels from using the Strait. And Brent crude oil immediately jumped almost 4% in a single day, back above $82. By Friday, it closed around $83. So basically oil traders are trying to answer one question. Are we actually getting closer to reopening the state of Hormuz? Or are we about to get another escalation? And that matters for way more than just oil traders. Because higher oil prices means higher transportation costs, higher energy costs, higher production costs, and potentially higher inflation Which brings us to the most important part of the entire video what gonna happen next week Because Friday jobs report told the market the Federal Reserve might not need to raise interest rates but next week inflation report could completely change the story again. On Wednesday, August 12th, we get USCPI. And this is probably the number I'm going to be watching more than anything else next week. The BLS has the release schedule for 8.30 a.m. Eastern Time. Right now, economists are expecting headline inflation around 3.4% year over year. So imagine that CPI comes in way hotter than expected. Suddenly, the Fed has a problem. The labor market is weakening, but inflation is still too high. And the possibility of another interest rate hike comes straight back onto the table. That could strengthen the dollar again, which means that some of Friday's Euro-USD massive move could potentially unwind. But if CPI comes in cooler than expected. Now you have weak employment and cooling inflation, and the argument for raising interest rates becomes much weaker. That could put even more pressure on the dollar and potentially give EURUSD another reason to move higher. Then on Thursday, we get U.S. producer price index data, which, well, gives us another look at inflation further and the supply chain. So if you're trading Forex next week, especially EURUSD, don't just look at Friday's giant green candle and assume euro suddenly became incredibly strong. This move was primarily about the dollar getting weaker after a huge employment report changed expectations for federal reserve policy. And now the market is waiting for the next piece of the puzzle, inflation. Friday gave us one answer. Next Wednesday could change the question entirely. And that's what I'll be watching. If you guys enjoyed this video, please let me know in the comment section down below and we will see you in the next one.