The US Dollar Index is steady at about 99.55 in the Asian session as traders wait for the US Nonfarm Payrolls data for September. This report, expected on Thursday, was delayed due to the longest government shutdown in US history. Federal Reserve officials are concerned about risks in the US labor market. Fed Governor Christopher Waller hinted at a possible interest rate cut in December, while Vice Chair Philip Jefferson described the labor market as “sluggish.”

CME FedWatch Tool Predictions

The CME FedWatch tool shows a 43% chance of a 25 basis point interest rate cut at the Federal Reserve’s meeting on December 10, down from 62% a week earlier. Traders are looking for insights from upcoming speeches by Fed members Michael Barr and Thomas Barkin. The Nonfarm Payrolls report is expected to show an addition of around 50,000 jobs in September, with the unemployment rate likely staying at 4.3%. If the data is weaker than expected, it could weaken the US dollar in currency markets. The US Dollar Index remains steady near 99.50 as we anticipate the delayed Nonfarm Payrolls (NFP) report on Thursday, November 20. This data point has built up uncertainty after the recent government shutdown. Federal Reserve officials have expressed concerns about a “sluggish” labor market. Governor Waller has suggested a potential rate cut in December, but the market isn’t fully convinced, with only a 43% chance of a cut. This difference between the Fed’s commentary and market expectations is a key source of tension. Recent statistics back up the Fed’s cautious stance, making a weak NFP number more probable. The Consumer Price Index for October 2025 showed inflation easing to a 3.1% annual rate, and last week’s initial jobless claims rose to 235,000. These figures suggest the economic slowdown that Fed officials are worried about may already be happening.

NFP Report Implications and Strategies

The expectation for NFP is low, at 50,000 jobs, following a very weak addition of 22,000 jobs in August 2025. A number far below this forecast could lower the dollar’s value and increase the likelihood of a December rate cut. On the other hand, an unexpectedly strong number could lead to a sharp rally in the dollar as traders quickly adjust their positions. For derivative traders, implied volatility on dollar-related options is likely to be high leading up to the report. Strategies like buying long straddles or strangles on major pairs like EUR/USD or the SPDR S&P 500 ETF (SPY) could help take advantage of significant price moves in either direction. The market’s reaction could be heightened as it reacts to delayed information all at once. Traders should manage directional plays with care. Those expecting a weak jobs report might think about buying puts on the Dollar Index (DXY) or call options on Gold. However, these positions carry risks if the data surprises on the positive side. Historically, after the 2013 government shutdown, the market saw extreme swings once delayed data was finally released, so using options to protect positions is a wise decision. Create your live VT Markets account and start trading now.

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