The dollar index traded just below 97 on Wednesday, extending recent losses as investors positioned themselves ahead of the delayed January employment report. Consensus forecasts point to a gain of 70,000 jobs in January, following a 50,000 increase in December, with the unemployment rate expected to remain unchanged at 4.4%.
Any downside surprise in the jobs figures could further undermine risk appetite, particularly after Tuesday’s retail sales data unexpectedly flatlined, underscoring growing strain on lower- and middle-income consumers.
The dollar also came under pressure amid concerns about foreign demand for US assets, following reports that Chinese regulators have urged financial institutions to curb their holdings of US Treasuries. That guidance has reinforced the perception that investors may be rotating out of dollar-denominated assets and into safe havens and selected emerging markets.
Meanwhile, Commerce Secretary Howard Lutnick said Tuesday that the dollar is being kept artificially strong by other countries seeking to boost their exports to the United States.
