By Agustina Patti, Financial Markets Strategist at Exness
The dollar index was stable on Wednesday, as investors awaited new catalysts that could shape the Federal Reserve’s monetary policy trajectory. The FOMC minutes later today and Thursday’s delayed nonfarm payrolls report are set to influence sentiment and shift expectations for the December Fed meeting. US Treasury yields reflected that uncertainty, with muted moves across the curve and the 10-year hovering near 4.12%. Traders remain split on the Fed’s next move, with market pricing now showing a 46% probability of a December rate cut versus a pause.
Tuesday’s initial jobless claims, the first official labor update since late September, offered fresh evidence of softening conditions. New filings totaled 232,000 for the week ending October 18, above expectations. Continuing claims rose to 1.957 million, in line with other signs of weaker hiring and slower labor demand.
Attention now turns to Thursday’s NFP release, expected to show job growth rising from 22,000 to around 50,000, while the unemployment rate is forecast to hold at 4.3%. Any signs of labor market fragility would likely strengthen expectations for a December cut and pressure both the dollar and yields. Conversely, stronger-than-expected figures could offer the greenback a short-term boost and give treasury yields room to rise.