The U.S. dollar fell sharply in early Asian trading on Friday, leading losses across major currencies as investors digested weak labor market signals. With the U.S. government shutdown delaying official employment reports, traders turned to private surveys showing signs of strain in the job market — particularly in the government and retail sectors.
According to data from the Challenger job cuts report, layoffs surged in October as businesses accelerated cost-cutting measures and adopted artificial intelligence to streamline operations. The dollar index, which measures the greenback’s strength against six major currencies, dropped 0.5% to 99.67, reversing gains from earlier this month. Market sentiment has shifted sharply, with expectations rising for a Federal Reserve rate cut at its December 10 meeting.
“U.S. Challenger jobs data indicated a spike in job cuts, suggesting a possible cooling in labor market conditions,” analysts at Westpac said in a note. The uncertainty has prompted traders to increase bets on a rate cut, even as Chicago Fed President Austan Goolsbee urged caution, noting that the lack of official data makes the outlook “foggy.”
Futures trading now implies a 70% probability of a rate cut, up from 62% a day earlier, according to the CME FedWatch tool. The dollar traded at ¥153.17 against the yen, while the Australian and New Zealand dollars held steady at $0.6479 and $0.5635, respectively. The offshore yuan remained flat at 7.1233 per dollar.
Meanwhile, sterling held at $1.3135 after the Bank of England left rates unchanged in a narrow 5–4 decision, with Governor Andrew Bailey casting the deciding vote. The euro hovered near a one-week high at $1.1550, supported by investor optimism despite slowing U.S. economic signals.
source: cnbc