US Dollar, USD, 72/100, Bullish: greenback hits highest since May 2025 ahead of nonfarm payrolls.
Learn why the dollar is rallying hard on twin pillars of Fed rate-hike bets and Japanese inflation momentum, and which level matters most for EUR/USD traders into the North American session.
What Happened
The US Dollar surged to its strongest level since May 2025 on Friday, propelled by a confluence of domestic inflation signals and hawkish Fed messaging. Multiple Federal Reserve officials, including Logan, Cook, Jefferson and Kashkari, flagged persistent upside risks to inflation and the case for additional rate hikes ahead, with some explicitly rejecting the notion of extended policy patience. This commentary arrived as markets braced for the monthly nonfarm payrolls release, a high-stakes print that historically moves currency pairs sharply and could either cement or challenge the bullish USD narrative.
Beyond the Fed rhetoric, the dollar's strength was underscored by a parallel hawkish shift in Japanese monetary policy. Tokyo's core consumer price index jumped to 2.7 percent, the fastest pace in ten months, while core-core inflation hit 3.0 percent as price pressures broadened across the economy. This data strengthened the case for an imminent Bank of Japan rate hike, suggesting that both the Fed and BOJ are on tightening paths, a dynamic that historically supports the greenback against its Japanese counterpart even as it tests relative yield advantages.
“Tokyo core CPI jumps to 2.7%, fastest in 10 months”— ForexLive · 23:45 UTC
Today's news timeline
- 03:01 UTC
- 03:01 UTC
- 06:01 UTC
- 06:01 UTC
Market Reaction
The broader forex market reflected a clear risk-on undercurrent, with the US Dollar strengthening across the board while safe-haven assets took a back seat. The widest sentiment gap emerged between the bullish USD at 72/100 and the bearish Euro at 35/100, a 37-point spread driven partly by the widening France risk premium as the OAT-Bund spread broke 140 basis points and fed into a broader eurozone growth narrative. EUR/USD represents the session's key pair to watch, having pulled back from intraday highs as dollar momentum overwhelmed any brief countertrend relief.
GBP and CAD traded near neutral territory, with sterling slipping off session peaks at 1.3193 while the loonie retreated from higher levels around 1.4226, both reflecting the relative outperformance of dollar-denominated assets. The Japanese Yen, despite its own inflation-driven hawkish tilt at 68/100, still faced headwinds from a strengthening dollar seeking additional yield premiums. This pattern underscores how currency strength operates in a relative rather than absolute framework: the yen may be bullish on its own central bank fundamentals, but the dollar's appeal to yield-hungry flows is proving more powerful in the current session.
What's Driving the Move
Three key threads run through the bullish US Dollar story:
- Fed officials Jefferson, Cook, Logan and Kashkari all signaled upward inflation risks and the need for further rate hikes, rejecting market expectations of extended policy patience and supporting dollar demand ahead of nonfarm payrolls.
- Tokyo's core consumer price index surged to 2.7 percent, the fastest reading in ten months, alongside a core-core print of 3.0 percent, cementing the case for Bank of Japan tightening and widening the interest-rate differential in the dollar's favor.
- France's sovereign debt risk premium jumped sharply as the OAT-Bund spread widened past 140 basis points, triggering broad euro weakness and reinforcing the safe-haven bid for dollar-denominated instruments.
“Dollar hits highest since May 2025 before payrolls; Asia FX slips despite strong data”— ForexLive · 06:01 UTC
What to Watch Next
Asia's opening will test whether the dollar's Friday momentum persists or succumbs to mean reversion as Tokyo processes the full implications of its own hawkish CPI surprise against dollar strength.
Each pair page carries the live score, the latest headlines and the session bias record. All 15 pairs.
Pepperstone offers spreads from 0.0 pips on major pairs, fast execution and MT4/MT5/cTrader support.
Open a live account →How this briefing was written: AI-drafted from real forex news headlines scanned every 3 hours by FXNewsBias, then auto-published on a fixed session schedule. Sentiment scores reflect news flow only, not technical signals or price action. This is information, not financial advice. Always cross-check with your own analysis before trading.