Dollar Index Climbs Toward 99 as Markets Brace for US Jobs Data

Key Moments

US Dollar Index (DXY) extends its advance to a fourth straight session, trading near 98.90 during Asian hours on Friday.
US Initial Jobless Claims rise to 208,000, above the prior week’s revised 200,000 but slightly below expectations of 210,000.
December Nonfarm Payrolls are projected at 60,000, compared with 64,000 in November, as traders watch for labor market signals and Fed implications.

Dollar Extends Rally Ahead of Key NFP Release

The US Dollar Index (DXY), which tracks the performance of the US Dollar against a basket of six major currencies, is pushing higher for a fourth consecutive session. During Asian trading hours on Friday, the index is quoted around 98.90, reflecting steady demand for the Greenback as market participants position ahead of the upcoming US Nonfarm Payrolls (NFP) report.

Investor focus is firmly on the December NFP data, which are anticipated to provide further clarity on the state of the US labor market and the potential direction of Federal Reserve policy. Consensus forecasts point to an increase of 60,000 jobs, down from the 64,000 positions added in November.

Labor Market Data Paint Mixed Picture

Fresh weekly claims data from the US Department of Labor show a modest uptick in layoffs. For the week ended January 3, Initial Jobless Claims rose to 208,000. That figure was marginally below the market estimate of 210,000 but stood above the prior week’s revised level of 200,000. Continuing jobless claims also moved higher, reaching 1.914 million compared with 1.858 million in the previous week, signaling a gradual increase in the number of people remaining on unemployment benefits.

Earlier in the week, US Automatic Data Processing (ADP) reported that its Employment Change measure showed an addition of 41,000 jobs in December. This followed a revised loss of 29,000 jobs in November and came in slightly under expectations of a 47,000 increase.

Additional insight into labor demand came from the JOLTS survey, which indicated that Job Openings stood at 7.146 million in November. This was down from October’s 7.449 million figure, which had been revised from 7.67 million, and fell short of market forecasts of 7.6 million openings.

Labor Market Indicator	Latest Reading	Previous / Revised	Market Expectation
Initial Jobless Claims (week ended Jan 3)	208,000	200,000 (revised)	210,000
Continuing Jobless Claims	1.914 million	1.858 million	Not specified
ADP Employment Change (Dec)	41,000	-29,000 (Nov, revised)	47,000
JOLTS Job Openings (Nov)	7.146 million	7.449 million (Oct, revised from 7.67 million)	7.6 million
Nonfarm Payrolls (Dec forecast)	60,000	64,000 (Nov)	60,000 (consensus)

Policy Signals and Fed Expectations

Monetary policy expectations remain central to Dollar trading. In an interview with CNBC on Thursday, US Treasury Secretary Scott Bessent argued that the Federal Reserve should continue easing. He said that lower rates are “the only ingredient missing” for even stronger economic growth and that the central bank should not delay.

Market pricing tracked by the CME Group’s FedWatch tool indicates that Fed funds futures currently assign about an 86.2% probability that the US central bank will leave interest rates unchanged at its upcoming January 27-28 meeting.

Nonfarm Payrolls: Definition and Market Impact

The Nonfarm Payrolls release measures the monthly change in employment across US non-agricultural businesses and is published by the US Bureau of Labor Statistics (BLS). The series is known for its volatility and for being subject to significant revisions, both of which can fuel sharp moves in currency markets.

In general, a stronger-than-expected payrolls number is interpreted as supportive for the US Dollar, while a weaker print tends to weigh on the currency. However, traders also pay close attention to revisions to prior months and to the Unemployment Rate, making the overall market reaction dependent on the full set of data in the report rather than the headline figure alone.

Nonfarm Payrolls Release Details	Value
Next release	Fri Jan 09, 2026 13:30
Frequency	Monthly
Consensus	60K
Previous	64K
Source	US Bureau of Labor Statistics

Why the Jobs Report Matters for Traders

America’s monthly jobs report is widely regarded as the single most important economic indicator for foreign exchange markets. Typically released on the first Friday following the reference month, the change in payrolls is closely aligned with the broader performance of the US economy and is monitored by policymakers.

Because full employment is one of the Federal Reserve’s core mandates, developments in the labor market are a key input into monetary policy decisions, influencing interest rates and, by extension, currency valuations. Even though several leading indicators help shape expectations, Nonfarm Payrolls releases often deviate from forecasts and can generate significant volatility. When the actual reading exceeds consensus estimates, the outcome tends to be bullish for the US Dollar, while a weaker figure is usually interpreted as negative for the currency.