FOREX-Dollar steady as mixed data digested ahead of Friday's jobs report

The euro was steady at $1.1679, on course for a small drop for the first week of the year ahead ⁠of data measuring consumer, business and economic sentiment from the region. The single currency surged about 13.5% in 2025, taking advantage of the dollar's dismal performance, and some analysts expect the euro to break through the $1.2 mark in 2026.

The dollar was calm on Thursday as ‌investors weighed a slate of data that gave mixed signals about the health of the U.S. economy while they await a crucial jobs report on Friday. The euro was steady at $1.1679, on course for a small drop for the first week of the year ahead ⁠of data measuring consumer, business and economic sentiment from the region.

The single currency surged about 13.5% in 2025, taking advantage of the dollar's dismal performance, and some analysts expect the euro to break through the $1.2 mark in 2026. Sterling was last at $1.3456, down 0.3% on the day but hovering close to the near four-month high it hit earlier in the week.

Data on Thursday showed the ​U.S. labour market appeared stuck in a "no hire, no fire" state, with job openings falling more than expected in November while hiring eased. However, services sector activity unexpectedly picked ‍up in December, suggesting the economy ended 2025 on a solid footing. The spotlight will now be on the closely watched nonfarm payrolls report due on Friday.

"The latest U.S. data releases paint a mixed picture of the economy," said Lloyd Chan, senior currency analyst at MUFG. "For the Fed, this mix of signals could reinforce a cautious approach." Traders are pricing in at least two rate cuts from the Federal Reserve this year, although a divided central ⁠bank indicated in December ‌just one more cut for 2026. Markets broadly ⁠expect the Fed to stand pat on rates in January.

The Japanese yen was flat at 156.69 per U.S. dollar as traders remained reluctant to place major bets before the release of economic reports. The Australian dollar eased ‍to $0.6704, just below the 15-month high it touched earlier this week, while the New Zealand dollar fell 0.13% to $0.5763.

The dollar index, which measures the U.S. currency against six rivals, was steady at 98.737 and ​set for a small gain for the week. The dollar is coming off its worst annual performance since 2017, with analysts predicting another year of decline, albeit a ⁠more modest drop. "We might not see as many Fed rate cuts as expected in 2026, mainly because the country's robust growth does not justify aggressive cutting," said Matthias Scheiber, senior portfolio manager and the head of the multi-asset team ⁠at Allspring Global Investments.

"An ideology shift toward a more pro-growth approach in setting interest rates is possible. However, the Fed will need to very carefully communicate its outlook and method for handling the growth-versus-sticky inflation trade-off." Markets have taken in stride the geopolitical worries across the globe after the U.S. intervention in Venezuela and the rising tensions between China and Japan this ⁠week, with currencies mostly calm through the week.

Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities, said the more important driver for the dollar will be a possible Supreme Court ⁠decision on U.S. President Donald Trump's tariff policies on ‌Friday. Speculation has increased that the decision could come as soon as Friday after the Supreme Court scheduled the day to make rulings. The court does not announce ahead of time which rulings it intends to issue.

"If there is a decision that the tariffs are ⁠constitutional, this takes the demand for refunds off the table. This would be USD positive," Newnaha said.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)