US Dollar weakens on higher-than-expected Jobless Claims
Source Fxstreet
- The US Dollar index plunged below its 20-day SMA, trading below 106.00.
- Soft labor market data seems to be pushing the buck lower.
- If economic data continue coming in soft, markets might continue to bet on a more dovish Fed.
The US Dollar (USD) is under significant selling pressure on Thursday as markets gear up for the release of November's United States (US) Nonfarm Payrolls (NFP) data on Friday. The Greenback’s decline has been driven by weaker-than-expected labor market signals, including a sharp rise in Initial Jobless Claims and an increase in layoffs reported by the November Challenger Job Cuts data.
Friday’s NFPs from November will set the pace of the USD’s price dynamics for the next sessions.
Daily digest market movers: Buck continues weak ahead of Friday’s NFP
- The Challenger Job Cuts report for November revealed 57,727 layoffs, higher than October's 55,597, signaling a concerning uptick in job cuts.
- Weekly Initial Jobless Claims for the week ending November 29 surged to 224,000, exceeding expectations of 215,000 and up from the previous week's 215,000.
- The CME FedWatch Tool now suggests a 70% probability of a 25 basis points (bps) rate cut at the Federal Reserve's (Fed) December 18 meeting.
- As the Fed has stated that it remains data-dependant, if NFPs on Friday show weak results, it might start to fully price in a cut in December’s meeting.
DXY technical outlook: Short-term weakness intensifies, 20-day SMA gone
The US Dollar Index (DXY) broke below its 20-day Simple Moving Average (SMA), marking a critical technical setback that has weakened its short-term outlook. Indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) are nearing negative territory, underscoring the growing bearish momentum.
Key support levels now lie at 105.50 and 105.00, while resistance may emerge at 106.50 and 107.00. With the DXY losing steam, market participants will closely watch Friday's NFP data for any signs of reversal or further deterioration.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from the Bank for International Settlements. Following the Second World War, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold until the Bretton Woods Agreement in 1971, when the Gold Standard went away.
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
Bitcoin experienced a sharp decline this weekend, briefly erasing its 2025 gains and dipping below its year-opening value of $93,507. The cryptocurrency fell to a low of $93,029 on Sunday, representing a 25% drop from its all-time high in October. Although it has rebounded slightly to around $94,209, the pressures on the market remain significant.
The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
Looking ahead, questions linger regarding the viability of the four-year cycle thesis, particularly given the increasing institutional support and regulatory frameworks now in place in the crypto landscape. Matt Hougan, chief investment officer at Bitwise, remains optimistic, suggesting a potential Bitcoin resurgence in 2026 driven by the “debasement trade” thesis and a broader trend toward increased adoption of stablecoins, tokenization, and decentralized finance. Hougan emphasized the soundness of the underlying fundamentals, pointing to a positive outlook for the sector in the longer term.
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