The U.S. dollar found some stability on Thursday after several days of swings, as investors adopted a cautious stance ahead of key American employment reports and amid ongoing global bond market fragility tied to elevated debt concerns.
By 04:50 ET (08:50 GMT), the U.S. dollar index, which tracks the greenback against a basket of major currencies, rose slightly by 0.1% to 98.19.
The dollar has oscillated around the 98-point mark this week, fueled by growing speculation that the Federal Reserve could lower interest rates at its September 16-17 meeting. CME’s FedWatch Tool indicated that markets were pricing in over a 97% probability of a 25-basis-point rate cut.
Data showing weaker-than-expected job openings added to the view that the U.S. labor market is easing, increasing the likelihood of a Fed rate reduction to support employment. Several Fed officials have signaled this possibility, following Chair Jerome Powell’s remarks last month at the Jackson Hole symposium in Wyoming about a potential September cut.
Friday’s closely watched nonfarm payrolls report is expected to provide fresh insights into the central bank’s next moves. Labor market trends and inflation remain key drivers for Fed policy, though speculation has grown that easing employment may take precedence over persistent price pressures.
On Thursday, investors will also review weekly jobless claims and an Institute for Supply Management gauge of services sector activity.
Meanwhile, global bond markets, recently unsettled, were somewhat reassured by statements from Fed policymakers, including Governor Christopher Waller, reinforcing bets that interest rate cuts could be imminent.
An auction of longer-dated Japanese government bonds showed moderate demand, sufficient to prevent fresh market anxiety, even after the 30-year bond yield recently hit an all-time high. Bond yields typically move inversely to prices.
Additional debt sales are scheduled later in the day in France and the U.K., two countries that have been focal points of European bond market activity.
Against this backdrop, the euro remained largely unchanged, while sterling edged up 0.1% to $1.3454, and the Japanese yen weakened slightly.
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