Goldman Sachs warns: Non-farm payroll data may trigger a new round of weakness in the US dollar, benefiting the Euro and Yen.

Goldman Sachs' latest research report points out that the upcoming US June jobs report could be a key turning point for the US dollar. If the data shows continued weakness in the labor market, it could further strengthen market expectations for the Federal Reserve to shift towards a more accommodative monetary policy, thereby putting downward pressure on the US dollar. The current foreign exchange market is experiencing significant changes: with the significant easing of tensions in the Middle East geopolitics, and domestic fiscal policy disputes in the United States (such as the Section 899 regulation controversy and tariff games) temporarily taking a backseat, traditional macroeconomic data has once again become the main factor driving exchange rate fluctuations. It is worth noting that although the US-Europe interest rate differential remains at historically high levels, the recent decline in the US dollar index reflects a structural change in global capital flows. The cooling of market risk aversion directly leads to downward pressure on short-term US Treasury yields, further weakening the US dollar's safe-haven currency status. Goldman Sachs' analysis team emphasizes that if the non-farm payrolls data show unexpectedly weak performance, it will directly impact the US dollar's exchange rates with the euro and the yen, as it is the best indicator of the reality of the US economic growth slowdown. Such data performance not only intensifies market expectations for the Fed's interest rate cuts but also potentially triggers a new wave of US dollar selling. From a more macro perspective, even if the June employment data does not show extreme weakness, a gradual weakening of the US dollar index is still the most likely scenario. This mild depreciation trend will benefit emerging market assets, particularly the Chinese yuan exchange rate is expected to receive support, and its spillover effects will also affect the entire Asian currency system. Goldman Sachs ultimately judges that the June jobs report has essentially become a "stress test" for the US dollar's outlook. If the data unexpectedly falls significantly below expectations, the US dollar may face a wave of selling pressure; if the data meets expectations, the market will continue with the trading theme of "moderate US dollar depreciation + benefit for risk assets". This new narrative in the foreign exchange market led by traditional economic data is replacing the previous volatility logic led by geopolitics and fiscal policy.