The dollar index remains down approximately 9.5% year-to-date, tracking toward its steepest annual decline since 2017, despite recent stabilization near early October lows.
At 16:13 GMT, DXY is trading 98.324, up 0.113 or +0.12%.
Mixed Jobs Data Keeps Federal Reserve on Sidelines
November’s employment report delivered a complicated picture for monetary policy. Nonfarm payrolls added 64,000 jobs, exceeding the 45,000 consensus estimate, but October figures were sharply revised to show 105,000 job losses. August payrolls were revised down by 22,000 to -26,000, while September’s gains were trimmed by 11,000 to 108,000.
More concerning, the unemployment rateclimbed to 4.6% from 4.4% in September, marking a four-year high. Jeff Schulze, head of Economic and Market Strategy at ClearBridge Investments, noted the data “set a modestly dovish tone for U.S. monetary policy in 2026,” adding that rising unemployment “will keep the hopes of another cut alive in the first quarter since labor slack appears to be gradually building.”
Federal Reserve Chair Jerome Powell previously suggested payroll figures may have been overstated by up to 60,000 monthly since April, indicating underlying weakness could exceed surface-level readings. Fed funds futures currently price just a 22% probability of a January rate cut, with markets anticipating two cuts throughout 2026 despite the Federal Reserve projecting only one.
Inflation Report Faces Data Complications
Thursday’s CPI release arrives under unusual circumstances. Barclays economist Pooja Sriram warns the November report “is unlikely to be seen as a ‘clean’ read on inflation” because the Bureau of Labor Statistics won’t publish separate October data following delays from the 43-day government shutdown. Markets must instead rely on two-month changes from September to November.
