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Dollar Pulls Back as Weak U.S. Layoff Data Lifts Odds of December Fed Cut

With official jobs figures delayed by the shutdown, traders leaned on private reports that signaled cooling labor conditions and reshaped rate expectations.

Overview

  • The dollar index fell roughly 0.5% to about 99.67 in early Asia before stabilizing, with Fed funds futures pricing a roughly 65%–70% chance of a December 10 rate cut, according to CME FedWatch.
  • Fed Chair Jerome Powell previously cautioned that a December move is not assured, while Austan Goolsbee and Philip Jefferson urged a slow approach in the absence of full data.
  • Challenger, Gray & Christmas reported more than 150,000 October job cuts, the largest for that month in over two decades, prompting a broad reevaluation of the U.S. outlook.
  • The Canadian dollar rebounded from a near seven-month low around 1.4140 USD/CAD after the layoff data pressured the greenback, though earlier weakness tracked a breach of resistance and softer oil near the high-$50s.
  • The Indian rupee firmed to about 88.60 on Thursday then hovered near 88.65–88.69 on Friday as foreign outflows and a steadier dollar weighed, with state-run bank dollar sales linked to RBI support helping keep USD/INR below the 88.80 record high.