USD steadies after jobs data – Scotiabank
Source Fxstreet
Friday’s US NFP data served to muddy the Fed policy outlook rather than resolve it conclusively, Scotiabank’s Chief FX Strategist Shaun Osborne notes.
USD broadly higher after NFP report
“The data showed slightly lower than forecast job growth and the expected drop in the unemployment rate but also reflected significant downward revisions to the prior two months’ payroll data. The downward revision was the initial focus for markets, driving the USD lower before it quickly steadied. A little later, headlines covering comments from Fed Governor Waller highlighted him favouring ‘front-loading’ rate cuts, pushing the USD down again.”
A broader read of the remarks showed that Waller, in fact, suggested ‘careful’ rate cuts starting in September. Equivocal data plus the Waller comments prompted markets pare back Fed September easing expectations somewhat whilst extending total easing bets through year end fractionally. The USD is trading generally firmer today as markets pare back some of the additional year-end easing swaps had priced in.”
“Still, the broader trend lower in US rates and the erosion in US term yield spreads will likely prevent a significant rebound in the USD for now. There are no top-tier US data reports today; CPI data Wednesday and PPI Thursday are the main calendar risk items for US markets this week.”
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The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
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Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
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The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
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