The U.S. dollar was positioned for its third consecutive daily gain on Thursday as mixed American economic reports left markets cautious ahead of Friday’s nonfarm payrolls release that could shape Federal Reserve policy expectations. Key indicators showed job openings fell more than expected in November and hiring remained subdued, suggesting a labour market that may be stabilising rather than overheating.

Currency markets have been adjusting to the dichotomy of weak job openings and firm services growth, with the dollar’s modest rally viewed as partly technical and partly fundamental. Investors are watching how the data will influence expectations for interest rate policy later this year, as the Fed weighs whether inflation and employment trends justify easing.

Emerging market currencies saw mixed performance, influenced by specific domestic drivers and external sensitivity to the dollar’s movements. Asian forex markets exhibited caution, particularly as geopolitical risk premiums influenced capital flows.

Currency analysts note that the dollar’s behaviour this week may set the tone for broader FX dynamics in early 2026, especially as major central banks articulate their policy intentions.

Looking ahead, the nonfarm payrolls report due Friday is expected to be a significant catalyst for currency volatility, as traders attempt to gauge the true trajectory of the U.S. labour market and its implications for global monetary policy.

Source: Reuters.