FX.co ★ Dollar Rises Ahead of Key Jobs Report

The US Dollar Index rose to around 101.7 on Friday, finding support as investors positioned themselves ahead of the October jobs report, which is expected to offer fresh insight into labor market conditions and help shape expectations for Federal Reserve policy. Recent data showed that private employers added 86,000 jobs in October, according to ADP, while initial jobless claims fell to their lowest level in 57 years.

Despite these stronger labor market signals, markets pared back the implied probability of a Fed rate hike in December to about 68%, from nearly 83% the day before. The adjustment in rate expectations followed a sweeping Democratic victory in the US midterm elections, which sparked a sharp equity market selloff amid concerns over tighter regulation of the AI sector and a potential slowdown in data center investment. At the same time, investors expect that Democrats could push to wind down the Iran conflict, a move that might put downward pressure on oil prices and help alleviate inflationary pressures.