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Dollar Holds Steady as Traders Await U.S. Jobs Report

The U.S. dollar traded in a narrow range on Thursday as market participants adopted a cautious stance ahead of Friday’s highly anticipated nonfarm payrolls report. With investors reluctant to make bold moves before the key labor data, the greenback remained broadly stable against major currencies.

The dollar index, which measures the greenback against a basket of six currencies, hovered near 105, showing little movement during the Asian and early European sessions. This muted performance reflects market uncertainty over the strength of the U.S. labor market and its implications for the Federal Reserve’s next policy steps. Reuters

Traders in Wait-and-See Mode

After a volatile week marked by fluctuating economic indicators, traders are choosing to stay on the sidelines, avoiding large positions until the payroll data provides clarity. A weaker-than-expected report could revive hopes for interest rate cuts, putting downward pressure on the dollar. On the other hand, a strong jobs reading may reinforce the Fed’s hawkish stance, offering support to the currency. The Economic Times

Recent data on job openings and private hiring have painted a mixed picture, adding to the uncertainty. While there are signs of a softening labor market, pockets of resilience remain, leaving investors unsure of what Friday's data will reveal.

Fed Policy Outlook in the Spotlight

The labor report is expected to play a pivotal role in shaping expectations for the Federal Reserve’s next move. If the data signals slowing job growth or easing wage inflation, it may boost bets on a rate cut later this year — a scenario that typically weakens the dollar. Conversely, strong job creation and robust earnings growth could delay any potential policy easing.

With inflation still above the Fed’s 2% target and the central bank maintaining a data-dependent approach, the upcoming figures could prove decisive. Fidelity

Dollar Likely to Stay Range-Bound

Until clearer signals emerge from the labor market, the dollar is likely to trade sideways, with limited volatility. Currency traders remain focused on macroeconomic fundamentals, awaiting confirmation of either a continued soft landing or signs of deeper economic cooling.

In the near term, all eyes are on Friday’s payrolls — a key driver that could reset expectations for the U.S. economy and interest rate trajectory.

 

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