Dollar Bounces Off Strong Jobs Report, But Markets Await CPI Release

Markets reacted to the strong US jobs report by initially spiking and then quickly reverting back to pre-report levels, with traders waiting for next week's CPI release before making decisions.

The Non-Farm Payroll (NFP) data showed a better-than-expected 162,000 new jobs added in July, up from the expected 56,000. This led to rate-hike expectations soaring, causing stocks and gold to briefly take a hit.

The bond market fell, yields rose, and markets now expect the Fed to hike interest rates in September, with the probability increasing to 59% from 49%. The US dollar initially gained strength but quickly lost ground, while other currencies like EUR/USD and USD/JPY experienced losses before rebounding.