US Dollar Index rallies above 99.00, with US jobs and tariffs ruling on tap

• The US Dollar Index has rallied beyond 1% in 2026, to reach one-month highs above 99.00.
• Cautious markets amid growing geopolitical tensions have underpinned demand for the USD.
• Later today, the US Supreme Court ruling on tariffs and NFP data might test the strength of the Greenback's momentum.

The US Dollar Index (DXY) extends gains for the fourth consecutive day on Friday, reaching levels right above the 99.00 level for the first time in the last four weeks. The Greenback is drawing support from a cautious market, with US President Donald Trump’s tariffs and December’s payrolls report on focus.

The US Dollar is on track for a 0.60% rally this week and a more than 1% appreciation in the last two weeks, showing the stronger performance among the major currencies so far in 2026. A mild risk-off tone amid growing geopolitical tensions in different regions of the world has been a key source of support for the Greenback over the last two weeks.

Trump’s tariffs are in the spotlight again

On Friday, Investors are holding their breath as the US Supreme Court meets to decide on Trump’s rights to invoke the International Emergency Economic Powers Act of 1977 to impose trade tariffs on most of the country’s trading partners.

Data released by Reuters revealed that US corporate lawyers have prepared claims for reimbursements of about $150 billion on import levies already paid by companies, in case the court rules against them.

Apart from that, the US Bureau of Labour Statistics (BLS) will release December’s Nonfarm payrolls report at 13:30 GMT. Net employment is expected to grow at a moderate pace, showing a 60K increase in December, following a 64K rise in November. The unemployment rate is seen easing to 4.5% from 4.6% in the previous month.

Barring a significant deviation from the market consensus, these figures are unlikely to ease the divergence among the US Federal Reserve’s (FED) policymakers, concerning the pace of further monetary easing. Futures markets are pricing a 13% chance of a rate cut after the January 27-28 meeting, while the odds for a March rate cut have dropped to 36.5% from 44% one week ago.