US Dollar Index DXY Stays Below 97.00 Ahead of Crucial US Payrolls Data

US Dollar Index Remains Subdued Below 97.00 Ahead of Key Jobs Data

The US Dollar Index (DXY) continued to trade below the 97.00 mark on Thursday, as markets remain cautious ahead of the US Nonfarm Payrolls (NFP) report for June.

The index has declined over 2% in the past two weeks, making it one of the weakest major currency benchmarks amid renewed Federal Reserve rate cut speculation.

Weak ADP Employment Report Fuels Fed Cut Expectations

The US ADP Employment Change released Wednesday came in significantly below expectations, adding to concerns over labor market softness. That data, which showed a decline in private-sector job growth, has strengthened the case for a potential Fed rate cut, limiting demand for the US Dollar.

The rebound attempt toward the 97.10 area was capped, turning that zone into short-term technical resistance for the DXY.

US-Vietnam Deal Dampens Safe-Haven Demand

Adding to the bearish sentiment, a US-Vietnam free trade agreement has slightly improved global trade sentiment, reducing demand for the safe-haven greenback. Risk appetite has returned modestly, further weighing on the Dollar’s upside attempts.

What’s Next? NFP and Market Direction

All eyes now turn to the NFP report, which could set the tone for the Dollar’s trajectory in July. Traders will also monitor wage growth and the unemployment rate to gauge the Fed’s next move.

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• Fed Rate Cut Speculation Builds After ADP Misses
• How NFP Data Impacts Forex Markets