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U.S. employment data in September was strong, and the U.S. dollar index fluctuated above the 100 mark
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Hello everyone, today XM Forex will bring you "[XM Group]: U.S. employment data was strong in September, and the U.S. dollar index fluctuated above the 100 mark." Hope this helps you! The original content is as follows:
The U.S. dollar index fluctuated in Asian trading on Friday. The U.S. dollar continued its gains against most major currencies on Thursday, with the U.S. dollar index rising 0.1% to 100.18, testing the six-month high set in early November. Markets reacted to signs of strong U.S. job growth in September, further weakening the chances of the Federal Reserve cutting interest rates in December.
Analysis of major currency trends
U.S. dollar: As of press time, the U.S. dollar index is hovering around 100.17. The recent risk aversion sentiment has provided certain hedging support for the U.S. dollar, but the U.S. dollar cross trend is still mainly affected by the Federal Reserve’s expectations. On the technical daily chart, the current price faces resonance suppression from multiple resistances in the 100.2285-100.3599 range. At the price level, the previous high of 100.3599 and the important level of 100.3 form a superimposed pressure zone. At the same time, this area is on the upper edge of the upward channel, forming the core resistance area for the short-term upward trend. In terms of indicator linkage, RSI recorded 65, which is in the strong area and close to the overbought threshold, and the continuity of bull momentum has significantly weakened; in the MACD indicator, the positive divergence of DIFF (0.2969) and DEA (0.2879) has narrowed, and the amplification of the MACD column line (0.0180) has weakened, suggesting that the bull momentum has been consumed.



1. The non-agricultural "big bomb" in September came late: 119,000 vs. the expected 50,000. Is the summer weakness just an illusion?
Due to the longest shutdown in U.S. government history, the non-agricultural data for September, originally scheduled to be released on October 3, was delayed until November 20. The results directly shocked the market: 119,000 new non-farm jobs were created in September, more than twice the 50,000 economists predicted! The August data was also significantly revised down to -0.4 million. This late but extremely strong report instantly tore the narrative of "the U.S. economy into a hard landing" to shreds. Morgan Stanley directly announced that night: giving up its forecast for an interest rate cut in December! They believe the extent of the summer employment slowdown has been grossly exaggerated, the economy has shown surprising resilience, and now don't expect the Fed to take action again until January 2026. Peter Grant, senior strategist at Zaner Metals, is more straightforward: "This data basically confirms the judgment in the minutes of the Federal Reserve's October meeting - the job market is only slowing down, but it is far from collapse, and the probability of an interest rate cut in December is getting smaller and smaller."
2. The U.S. government restructures the Department of Energy to prioritize the development of fossil fuels and nuclear energy
On November 20, local time, the U.S. Department of Energy announced a reorganization that would prioritize petroleum and nuclear energy resources, replacing departments previously dedicated to renewable energy and energy efficiency. The Energy Department released a new organizational chart along with a brief statement saying the changes were consistent with U.S. President Donald Trump's energy-dominated agenda. The new structure map adds several new departments, including the Office of Hydrocarbons and Geothermal Energy and the Office of Fusion. The Office of Clean Energy Demonstration established by the Biden administration was rescinded. The Office of Energy Efficiency and Renewable Energy is also missing from the new structure map. The Office of Lending Programs, which provides financing for innovative energy projects, was renamed the Office of Energy-Led Financing.
3. The White House said it was discussing a peace negotiation plan with Ukraine
According to U.S. White House Press Secretary Levitt’s confirmation at a regular press conference on the afternoon of November 20, local time, senior U.S. government officials recently met with the Ukrainian side to discuss a “peace plan that should be acceptable to both Russia and Ukraine.” Levitt said that U.S. Secretary of State Rubio and U.S. Special Envoy for the Middle East Witkov participated in these talks. "The U.S. government is having good dialogue on how to end the Russia-Ukraine war and the two sides of the conflict."
4. Fed Paulson: Will treat December’s interest rate decision with caution
Federal Reserve Paulson said that she will treat next month’s interest rate decision with caution, but she is more worried about the weakness of the job market. Paulson said: "Each rate cut brings us closer to a level where policy shifts a little bit from suppressing economic activity to boosting economic activity. Therefore, I am cautious about the December FOMC meeting." She pointed out: "Each rate cut raises the bar for the next rate cut." Still, Paulson said: "I'm still more worried about the job market than I am about inflation, but I expect to learn a lot between now and the next meeting." Paulson added that the unemployment rate is "close" to full employment levels as labor supply and demand are basically balanced. However, the majority of new jobs are in health care and social assistance, a trend that could signal potential problems.
5. Japanese government adviser: Intervention may be triggered before the yen falls to 160
A Japanese government expert panel member said that as the U.S. dollar continues to move closer to the 160 level against the yen USD/JPY, the Japanese authorities may be closer to intervening in the foreign exchange market than many investors think. "Japan has such huge foreign exchange reserves," said Takuji Aida, chief economist at Fanon Credit, referring to the fact that the funds would likely be used in the event of government intervention. "Under Prime Minister Sanae Takaichi's government, it has been easier to accept the idea that we should actually use them." His xmtraders.comments came after the yen fell below the 157 level against the dollar on Thursday, reaching its lowest level since January. The last time Japanese authorities intervened was in July 2024, when the yen hit 160 against the dollar, a level that many market participants now believe will trigger a new round of intervention.pre. Aida said if the yen moves "get violent", authorities could step in before the yen hits that level.
Institutional Views
1. Institutions: Although non-farm payrolls were strong in September, the Fed's "tug of war for interest rate cuts" is not over yet
Wasif Latif, president and chief investment officer of Sarmaya Partners, said that the U.S. non-farm payrolls data in September definitely far exceeded expectations. The market is adjusting accordingly and re-weighing the Fed's "tug of war to cut interest rates." At present, the "no interest rate cut" camp has the upper hand, but the game is not over yet. There are still variables between now and the Fed's December interest rate decision. As data continues to be released, this tug-of-war will continue. September's data itself was okay, but it's October's data that's really critical, as that's when most of the layoff announcements occurred. If October data is available, it is likely to show that the job market is weaker than in September, which will obviously push the market towards interest rate cut expectations. Unfortunately we don’t have this information yet, so we have to judge based on the data we have.
2. Mitsubishi UFJ: The September non-farm payrolls report must be very weak to weaken the dollar
Lee Hardman, a foreign exchange analyst at Mitsubishi UFJ, said that after the U.S. Bureau of Labor Statistics announced the cancellation of the October non-farm payrolls report, investors' confidence in the Federal Reserve's interest rate cut in December gradually weakened. At the same time, the Bureau of Labor Statistics also postponed the release of the November non-farm payrolls report to December 16, which means that when the Fed makes a decision in December, it will only have today's September non-farm payrolls report. Uncertainty about the health of the labor market in October and November may lead the Federal Reserve to adopt a more cautious strategy and pause interest rate cuts in December. Therefore, the September non-farm payrolls report released today must be much lower than expected to encourage market participants to increase their bets on the Federal Reserve's interest rate cut in December, thereby weakening the dollar.
3. UBS: The pound is expected to strengthen against the U.S. dollar and the pound against the euro will be stable
Themis Themistocleous, EMEA chief investment officer of UBS Global Wealth Management, said in a webinar that as the Bank of England may be more cautious than the Federal Reserve in cutting interest rates, the pound may strengthen against the U.S. dollar next year. He pointed out that the UK's stubborn inflation and xmtraders.complex fiscal environment mean that the Bank of England will cut interest rates at a gradual pace. UBS expects the Bank of England to cut interest rates only twice more in 2026, leaving British government bond yields higher than those in the United States and the euro zone in the xmtraders.coming months. UBS expects GBP/USD to rise to 1.36 by mid-2026. xmtraders.compared with the euro, the pound is expected to remain stable against the euro, taking into account the UK's fiscal challenges and German fiscal stimulus that may drive economic growth in the euro area.
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