Weaker Dollar Supports Euro and GBP as Traders Eye Key Jobs Data.

• USD – Dollar Softens as Markets Respond to Weaker Labour Indicators

• EUR – Euro Pushes Slightly Higher as Yield Differentials Narrow Further
  

• GBP – Sterling Stable but Struggling to Rebuild Momentum

USD:

The U.S. dollar is trading on the back foot this morning after yesterday’s JOLTS job openings report showed a sharper-than-expected decline, reinforcing the narrative that U.S. labour-market cooling is underway. With markets already pricing in early-2026 Federal Reserve rate cuts, the softer data has strengthened expectations that the easing cycle could begin sooner rather than later. Treasury yields edged lower following the release, putting additional pressure on the dollar. Attention now turns to tomorrow’s ADP report and Friday’s non-farm payrolls, which will be crucial in confirming whether this weakening trend is broadening. For now, USD remains under measured downside pressure, with traders reluctant to buy the dip ahead of major labour data.

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EUR: 

The euro is trading modestly firmer against the dollar, supported by continued compression in U.S.–eurozone interest-rate expectations. While euro-area data has been mixed, the region’s inflation figures this week — which showed further gradual moderation — are broadly in line with the European Central Bank’s expectations, allowing EUR to benefit from external dynamics rather than domestic catalysts. With the dollar softening after U.S. labour-market data, EUR/USD has edged toward the upper end of its recent range. Momentum remains cautious, however, with investors still awaiting clearer signs of improvement in euro-area activity before committing to a sustained move higher. In the near term, the euro looks comfortable, buoyed by a softer dollar backdrop.

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GBP: 

Sterling is trading broadly steady this morning, though it continues to lack strong direction following last week’s Autumn Budget and recent soft UK data. With no significant domestic releases yesterday, GBP price action has been driven mostly by broader FX flows, particularly the weaker U.S. dollar. However, concerns about the UK’s growth outlook remain an underlying drag, limiting the pound’s ability to mount a sustained recovery. Investors are awaiting tomorrow’s UK services PMI final print, which is expected to offer more insight into domestic momentum heading into year-end. Against the euro, sterling remains slightly softer, with EUR/GBP maintaining an upward bias as euro stability contrasts with the UK’s more fragile macro tone. Near-term volatility is likely to stay moderate, but sentiment toward GBP remains cautious.

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