FX.co ★ Dollar Near 1-Month Lows

The dollar index remained relatively stable at approximately 98.8 on Thursday, lingering near its lowest point since late October. This stasis comes amid growing evidence of a weakening U.S. labor market, which in turn has bolstered expectations for a Federal Reserve interest rate cut in the upcoming week. Current market estimates suggest an approximately 87% likelihood of such a rate adjustment. The Challenger report indicated that layoffs surged to 71,321 in November, marking the highest count for that month since 2022 and bringing the year-to-date figure to 1.17 million, the largest since 2020. Additionally, the ADP report released yesterday unexpectedly revealed a decrease of 32,000 in private sector jobs. In contrast, initial jobless claims declined to 191,000 last week, the lowest in over three years, although this data was affected by the typically volatile Thanksgiving period. Investors are also considering reports that White House economic adviser Kevin Hassett may replace Federal Reserve Chair Jerome Powell in May, a potential indicator of a shift towards more aggressive policy easing. The dollar weakened against the yen and the pound, while gaining slightly against the Swiss franc.