The U.S. dollar moved inconsistently against major global currencies on Tuesday as investors positioned ahead of crucial U.S. labour and inflation data, following weeks of speculation surrounding a potential Federal Reserve rate cut in December.
The euro–dollar pair steadied around 1.16, recovering from a brief dip below 1.15 earlier in November. The greenback also strengthened against the Japanese yen, advancing 0.46% to 155.26, after nearly touching JPY155.5 during early European trading.
Japan’s economy contracted by 1.8% on an annualised basis in Q3 — slightly better than analysts predicted — an outcome that reinforces expectations that the Bank of Japan will continue to avoid aggressive rate hikes. The yen slid to its weakest level in ten months ahead of discussions between Prime Minister Sanae Takaichi and BOJ Governor Kazuo Ueda. Markets expect the meeting to provide clues on how Tokyo plans to manage yen pressures.
In Asia, the Hong Kong dollar slipped to 7.78 per dollar, its weakest level since October 2025. Over the past month, the USD/HKD pair has risen 0.12%, though it remains marginally weaker on a 12-month basis.
Market sentiment now shifts to upcoming U.S. datasets. The Bureau of Labor Statistics (BLS) will release the September jobs report on Thursday, offering fresh insight into labour-market conditions. After previous 50bps rate cuts, Fed officials have signaled that further easing is uncertain given persistent inflation and low unemployment.
ADP’s private sector employment forecast will arrive a day earlier. Historically, ADP readings have closely mirrored BLS data this year. Between June and August, the BLS estimated average monthly private job growth of 29,000, compared to ADP’s 26,000.
For September, ADP anticipates a 29,000 job decline, the largest drop since March 2023, though October saw a rebound of around 42,000.
The BLS is also expected to publish September CPI figures on Friday, which will guide Social Security cost-of-living adjustments and influence Fed expectations.
Meanwhile, Morgan Stanley anticipates the dollar will weaken through mid-2026 before stabilising. The bank projects the DXY index will fall from approximately 99.45 to 94.00 by mid-year as recessionary risks, labour-market concerns, and uncertain Fed policy weigh on sentiment.
In commodities, gold slipped below $4,000 for the first time in a week before reclaiming ground to trade around $4,050 in Europe. U.S. WTI crude (December contract) hovered near the upper end of Monday’s range, attempting to break above $60 per barrel.
