The US dollar was relatively flat today, stabilizing after a second week of declines. Weaker US labour data reinforced expectations of a Fed cut next week.
Yesterday’s ADP report showed a surprise 32,000 drop in private-sector jobs, signalling that the job market is losing steam and fuelling concerns about the economy.
Markets are still pricing close to an 87% probability of a 25 bps rate cut at the December FOMC meeting, in addition to more cuts during 2026.
In the meantime, traders could remain cautious ahead of jobless claims data and the delayed PCE inflation report, which could either lock in the dovish narrative or trigger a short-term rebound if the figures surprise on the upside. Compounding the bearish sentiment is the speculation that Kevin Hassett could replace Chair Powell in 2026 and favour a more aggressive rate-cutting cycle to stimulate growth. This prospect could continue to add medium-term bearish pressure on the greenback.
