The U.S. dollar held steady on Thursday following several volatile sessions, as traders adopted a cautious approach while awaiting crucial U.S. employment data and monitoring fragile global bond markets strained by high debt levels.
At 04:50 ET (08:50 GMT), the dollar index, which tracks the greenback against a basket of major currencies, inched up 0.1% to 98.19.
Throughout the week, the dollar has fluctuated near the 98-point level amid speculation that the Federal Reserve may reduce interest rates at its September 16-17 meeting. Fed funds futures indicate a more than 97% chance of a 25-basis-point cut, according to CME’s FedWatch Tool.
Soft job openings data reinforced the view that the U.S. labor market may be cooling, potentially prompting the Fed to ease rates to support employment. Several Fed officials have hinted at this possibility, echoing Chair Jerome Powell’s comments at last month’s Jackson Hole symposium regarding a potential September reduction.
Investors are focusing on Friday’s nonfarm payrolls report for additional insight into the Fed’s policy direction. Labor market trends, alongside inflation readings, remain key factors for rate decisions, though markets are increasingly anticipating that a softer jobs environment may outweigh persistent price pressures.
On Thursday, market participants will also examine weekly jobless claims and the ISM services activity report for further cues on economic momentum.
Bond markets, recently under stress, were somewhat stabilized by remarks from Fed officials, including Governor Christopher Waller, which strengthened expectations of an upcoming rate cut.
Meanwhile, a Japanese government bond auction saw muted demand, enough to prevent renewed market unease, despite the 30-year bond yield recently reaching a record high. Bond yields generally move inversely to prices.
Later today, France and the U.K. are also scheduled to hold government debt auctions, with both countries having been central to recent European bond market volatility.
In currency markets, the euro remained flat, sterling ticked up 0.1% to $1.3454, and the Japanese yen weakened slightly.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.