US Dollar Index Slips Below 97.00 Amid Weak Jobs Data and Fed Rate Cut Expectations

US Dollar Index Falls Below 97.00 on Soft Payrolls, Fed Rate Cut Buzz

The US Dollar Index (DXY) extended its decline to 96.70 in the early Asian session on Thursday, weighed down by weaker-than-expected employment data and growing expectations of a Federal Reserve interest rate cut this month.

US Private Payrolls Post First Decline in Over Two Years

According to the ADP National Employment Report, US private-sector payrolls fell by 33,000 in June — the first monthly contraction since early 2022. May’s figure was also revised down to a mere 29,000 jobs added. Markets had expected a gain of 95,000 jobs, making this data a major disappointment.

Fed Rate Cut Odds Rise on Dovish Tone

The weak jobs report has reinforced market expectations for a Fed rate cut, possibly at the upcoming FOMC meeting. Federal Reserve Chair Jerome Powell added fuel to the speculation by stating Tuesday that a rate cut is not off the table and will depend on incoming data.

Focus Turns to Nonfarm Payrolls

All eyes are now on today’s Nonfarm Payrolls (NFP) report for June. A weak number could confirm a labor market slowdown and solidify expectations of lower interest rates, potentially pushing the USD even lower.

📌 Stay updated with the latest US economic indicators in our Macro Data Coverage.