The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, trades flat around 99.55 during Tuesday’s Asian session. The index remains steady as markets prepare for the long-delayed return of key US economic data, with the September Nonfarm Payrolls (NFP) report scheduled for release on Thursday.
Federal Reserve officials continue to highlight growing risks in the labor market. Fed Governor Christopher Waller stated that policymakers should consider cutting interest rates at the December meeting, citing rising concerns over slowing job growth. He noted the sharp deceleration in hiring as a key risk.
Fed Vice Chair Philip Jefferson also commented on Monday that the labor market appears “sluggish,” pointing out that businesses are increasingly cautious about hiring amid policy uncertainty and rising interest in whether artificial intelligence could replace certain roles.
Market expectations for a December rate cut have cooled. Fed funds futures now imply a 43% chance of a 25 basis-point cut on December 10—down from 62% a week earlier and sharply lower than the near-certainty seen a month ago, according to the CME FedWatch Tool.
With the US government shutdown—the longest in history—now ended, traders are looking for fresh clues on the Fed’s policy outlook. Later today, investors will listen to remarks from Fed officials Michael Barr and Thomas Barkin. Any hawkish commentary could support the US Dollar in the short term.
The focus now shifts to Thursday’s NFP report. Economists expect the US economy to have added around 50,000 jobs in September, following a modest 22,000 increase in August. The Unemployment Rate is projected to remain at 4.3%. A weaker-than-expected reading could weigh on the US Dollar across major currency pairs.
