Market focus is firmly on today’s US jobs data, with the US dollar holding steady ahead of a key risk event for FX markets. Stay informed on what this could mean for currency movements in our latest market update below 🔽
Key Highlight
The US dollar has kicked off the year on a solid footing, supported by early market confidence.
Market Recap
The US dollar strengthened, reaching its highest level in two weeks, supported by upbeat economic data. Weekly jobless claims surprised to the downside, layoffs dropped to their lowest level since mid-2024, and a sharp narrowing in the October trade deficit is expected to contribute positively to fourth-quarter US growth. Meanwhile, the Australian dollar lagged peers after investors scaled back expectations for near-term RBA tightening. More cautious guidance from the central bank has pushed anticipated rate hike timing back from May to August.
Market Overview:
The US dollar is holding firm ahead of two key events that could shape near-term market direction: today’s US employment report and a potentially significant Supreme Court ruling on Trump-era tariffs. The Dollar Index is modestly higher on the day and set for a solid weekly gain, as investors consider the impact of a ruling that could maintain tariff revenues — a scenario that would likely support the USD. Conversely, any decision pointing towards refunds or reduced tariff income may increase uncertainty around US rates and weigh on the currency.
Attention now turns to US payrolls, where further signs of labour-market cooling are expected. Forecasts point to relatively modest job creation and a slight dip in the unemployment rate. A weaker-than-expected outcome would strengthen expectations for additional Federal Reserve rate cuts in 2026, potentially putting pressure on the dollar into the close of the week. Wage growth will be a key watchpoint, as persistently firm pay increases could temper any dovish market reaction.
09th January 2026
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