On Friday, the US Bureau of Labor Statistics reported that Nonfarm Payrolls (NFP) increased by 115K in April, surpassing market expectations of 62K. March’s figure was revised higher to 185K from 178K. The Unemployment Rate remained steady at 4.3%, while annual wage growth accelerated to 3.6%, below the expected 3.8% [1][2][3][5]. Average Hourly Earnings rose 0.2% MoM in April, also below the expected 0.3% [2][3].
Despite the robust headline jobs data, the US Dollar weakened, with the Dollar Index (DXY) falling to around 97.90–97.92, down roughly 0.37% on the day [3][5]. This weakness was attributed to softer wage growth and persistent optimism regarding potential US-Iran negotiations, even as new military strikes near the Strait of Hormuz heightened geopolitical tensions [1][2][3][5]. Fox News reported US airstrikes targeting empty tankers, and Iranian officials warned of a forceful response to any aggression [2]. President Donald Trump maintained that the ceasefire remains in effect, while Secretary of State Marco Rubio expected a response from Tehran on the latest peace proposal [3].
Market reactions were notable across several asset classes. Silver (XAG/USD) rallied 2.98% to $80.70, benefiting from safe-haven demand and the weaker US Dollar [1]. GBP/USD advanced to 1.3630, up 0.54%, as the Pound remained resilient despite UK local election results and supportive comments from Bank of England Governor Andrew Bailey, who warned of potential forceful action if Middle East tensions drive inflation higher [5]. AUD/USD surged above 0.7240, holding a bullish bias as technical supports absorbed dips, with upside pressure likely to persist [2]. USD/CAD climbed to 1.3694, its highest since April 29, as Canadian employment data disappointed (Net Change in Employment fell by 17.7K vs. expected +15K), and oil price declines pressured the Canadian Dollar [3].
Analysts at TD Securities noted that the stronger payrolls report produced only a modest reaction in the USD, as markets are now more focused on inflation, particularly the energy shock’s pass-through to core prices. They expect choppy USD trading in the near term, with downside for the Dollar remaining elusive unless there is progress in the Middle East. The upcoming CPI report is anticipated to be more closely watched than labor data [4].
Across the board, risk-sensitive assets were favored amid optimism for US-Iran talks, while the US Dollar remained pressured by softer wage growth and geopolitical uncertainty. The Bank of England kept its policy rate unchanged at 3.75% but left the door open for further tightening if needed [5].
CONCLUSION
The US Dollar weakened despite strong jobs data, as markets focused on softer wage growth and ongoing Middle East tensions. Safe-haven assets like silver and risk-sensitive currencies such as GBP and AUD benefited, while the Canadian Dollar suffered from disappointing employment data and falling oil prices. Analysts expect continued choppy USD trading, with inflation and geopolitical developments likely to drive future market direction.