SINGAPORE: The U.S. dollar weakened in early Asian trading on Friday, reversing gains made earlier this month as investors turned cautious amid a lack of official U.S. labor market data. The dollar index, which tracks the greenback against six major currencies, fell 0.5% to 99.674.
With the U.S. government shutdown delaying the release of the monthly non-farm payrolls report, traders relied on private sector data indicating job losses in government and retail sectors in October. The rise in announced layoffs, partly driven by cost-cutting and adoption of artificial intelligence, added to concerns of a cooling labor market.
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Westpac noted that U.S. Challenger jobs data showed a spike in job cuts, suggesting a possible slowdown in labor market conditions. Fed funds futures now imply a 70% probability of a U.S. rate cut at the Federal Reserve’s December 10 meeting, up from 62% the previous day. Chicago Fed President Austan Goolsbee urged caution, saying the absence of official inflation data during the shutdown makes rate decisions more uncertain.
Against other major currencies, the dollar traded at 153.17 yen, up slightly after Japanese household spending data showed a 1.8% year-on-year rise in September. The Australian dollar stood at $0.6479, the New Zealand dollar at $0.5635, and the offshore yuan at 7.1233 per dollar. Sterling remained flat at $1.3135 after the Bank of England held rates steady.
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The euro hovered near a one-week high at $1.1550. Meanwhile, U.K. Finance Minister Rachel Reeves signaled that her upcoming budget may include a rise in personal taxation, according to The Times, adding to cautious sentiment in currency markets.