USD Trades Lower Ahead of November NFP Data

The US Dollar (USD) is trading on the weak side as it hovers around the midpoint of its June–December price range. Market participants expect a volatile session as major US economic data is released. Attention is firmly on the November Nonfarm Payrolls (NFP) report, which is due later today, according to FX analysts at BBH.

US Employment Report Could Drive Market Moves

Economists are forecasting job growth of roughly 50,000 positions in November. This estimate also reflects updated survey data for October. The outlook follows a stronger gain of 119,000 jobs recorded in September. However, analysts note that the composition of job growth is just as important as the headline figure.

In September, a large portion of employment gains came from the healthcare and social assistance sector. These industries are considered non-cyclical, which raises concerns about weakening demand in more economically sensitive sectors. This trend increases downside risks for broader labor market strength.

Get a quick breakdown of the USD reaction to upcoming NFP jobs data. See why traders watch Nonfarm Payrolls closely and how it affects the dollar and currency pairs.

Signs Point to Slowing Labor Demand

Recent data suggests hiring momentum is fading. A drop in the hiring rate indicates softer demand for workers, which could weigh on today’s NFP outcome. ADP figures showed private sector employment rose by only 15,000 jobs. At the same time, data from Revelio Labs showed a combined decline of 25,000 jobs across public and private sectors in October and November.

Federal Reserve Chair Jerome Powell has also warned that employment gains since April may be overstated by around 60,000 jobs. Adjusted estimates suggest the economy has lost approximately 20,000 jobs per month since April, rather than posting steady gains.

Implications for the USD Outlook

Weaker labor market conditions strengthen expectations that the Federal Reserve could cut interest rates by 50 basis points next year. This outlook continues to pressure the USD. However, the currency could recover some ground if upcoming data signals that labor market conditions are beginning to stabilize.

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