FX.co ★ Dollar Pressured by Weak Jobs Data

The dollar index remained below the 100 threshold on Friday following a significant decline in the previous session. This movement was primarily driven by indications of a cooling labor market in the US, which heightened expectations for an interest rate cut by the Federal Reserve in December. Due to the ongoing government shutdown delaying the release of official employment figures, traders turned to private sector data for insights into labor market conditions. Notably, data from Challenger revealed 153,000 announced job cuts in October, marking the highest figure for that month in 22 years, attributed largely to the integration of artificial intelligence and cost-cutting measures. Consequently, market speculation about a December rate reduction intensified, with the likelihood of a 25 basis point cut rising to approximately 70%, an increase from 62% the previous day. Amid these developments, Chicago Fed President Austan Goolsbee emphasized the necessity of exercising caution in further easing, given the lack of official inflation data. The dollar experienced the most significant weakening against the yen, as investors sought refuge in the Japanese currency.