By Felipe Barragán, Expert Research Strategist at Pepperstone
September 26, 2025 –
“The greenback is trading on a firm undertone as investors sifted a dense U.S. data slate and stayed anchored to the Fed’s “go-slow” easing narrative. Weekly jobless claims edged lower to 218k for the week ended Sept. 20, a move that cooled talk of an imminent labor-market crack but didn’t alter the broader picture of a gradual softening in hiring and demand. That mix—resilience without re-acceleration—tends to support the dollar by keeping U.S. rates relatively attractive while denying markets a clean, dovish catalyst.
At the same time, the calendar kept macro risk premium elevated. BEA released its third estimate of Q2 GDP showing a robust growth of 3,8% above the 3,3% expectation—exactly the kind of revisions that nudge Fed´s rate-path pricing at the margin. With the Fed signaling caution on the pace of cuts, growth that looks “good enough” but not overheating has reinforced the market’s bias to fade aggressive easing timelines, a configuration that usually leaves the dollar with a floor.
Beyond the day’s prints, policy and flow dynamics are still doing heavy lifting. Recent Fed communications have leaned towards a more cautious stance—neither pre-committing to rapid easing nor inviting a re-acceleration in inflation expectations—which has kept rate-differential support in the dollar’s column and limited follow-through on pullbacks seen earlier in the week.
Put together, today’s dollar story is one of supported stability: incoming data weren’t soft enough to drag front-end yields lower, Fed messaging continues to discourage over-enthusiastic easing bets, and the currency’s structural bid remains present in the background.
For that narrative to change the market will need to see if subsequent data shows a clearer deterioration in employment or a sharper downshift in growth or inflation, rate-path expectations would roll over faster and the dollar’s cushion would thin. But as long as the macro tape stays “slow-cooling” rather than “hard-landing,” the balance of forces still argues for a firm-but-range-bound dollar rather than a decisive trend break.”