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    Analysts observe that the US dollar falls further due to a sharp increase in initial jobless claims.

    by VT Markets
    /
    Dec 12, 2025
    The US Dollar is facing pressure due to a rise in initial jobless claims, which have reached 236,000. This is the biggest weekly increase since March 2020. The job market is looking weak, with fewer jobs being created and more layoffs happening. Attention is on the upcoming reports – November’s Non-Farm Payroll (NFP) and Consumer Price Index (CPI). These reports will be released next week on December 16 and 18. If the data is weak, the USD might decrease further.

    December Trends

    The US Dollar often declines in December, a trend seen historically. Since 2000, December has been the weakest month for the dollar, showing an average drop of 1.07%. The USD index (DXY) has fallen in 17 out of the last 25 Decembers. The Dollar is under pressure as the labor market shows signs of weakening. Initial jobless claims increased to 242,000 last week, raising concerns after the November jobs report on December 5 revealed that job creation slowed to just 155,000. This decline in the dollar has been mirrored by a similar drop in U.S. Treasury yields. The ongoing trend of slowing job creation and rising layoffs means we are closely watching the November inflation report set to be released next Tuesday, December 16. A lower inflation figure could support the belief that the Federal Reserve might need to ease policies sooner rather than later, making the case for further dollar weakness stronger.

    Trading Strategies

    For derivative traders, the current environment suggests that buying put options on the Dollar Index (DXY) could be a smart move, preparing for a possible drop. Seasonal trends also support this strategy, as the dollar has fallen in 18 out of the last 26 Decembers, making it the weakest month of the year. Selling out-of-the-money call options on the dollar may also be a viable strategy to earn income, given that any rallies are expected to be limited. Create your live VT Markets account and start trading now.

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