U.S. dollar drops, set for best weekly gain since August
The Dollar Index traded 0.4% lower to 98.89, but was still on course for a 1.3% gain this week – the most since August 2025
The dollar slid on Friday, as traders upped rate cut bets by the U.S. central bank following a negative jobs report. Still, the currency was headed for solid weekly gains.
At 21:30 GMT, the Dollar Index traded 0.4% lower to 98.89, but was still on course for a 1.3% gain this week – the most since August 2025.
The focus on Friday was on the widely-watched February nonfarm payrolls report. The data showed a loss of 92k jobs last month. Economists had been expecting an addition of 58k jobs. Meanwhile, the unemployment rate ticked up to 4.4%.
The February plunge comes after a robust January reading of 126k (revised down from 130k). Moreover, December 2025’s job growth of 48k was revised to a slide of 17k.
Market participants reacted to the data by increasing their odds of central bank rate cuts. Higher interest rates generally strengthen the currency, while lower interest rates weaken it.
Despite Friday’s decline, the currency has benefited this week from the war in the Middle East that shows few signs of ending.
Unless there can be some real political breakthrough that leads to a ceasefire, the dollar won’t be ready to resume a decline anytime soon and the story will remain one of governments trying to handle the fallout of high energy prices, analysts at ING said in a note.
The Dollar Index is now close to the key level of 100.
Technically, 100.00 on the cash Dollar Index is a much more significant level of resistance. It was tested repeatedly back in November and held on every assault. Eventually the bulls gave up as upside momentum faded, and the Dollar Index went on to drop to a four-year low at the end of January this year. Some traders expected the decline to continue as speculation built that the U.S. dollar was on its way to losing its status as the world’s reserve currency, David Morrison, senior market analyst at Trade Nation, said.