US Dollar Remains Soft as Markets Await Key NFP Data

US Dollar Softens but Holds Ground Ahead of Friday's NFP Release

Cautious Sentiment Keeps USD Range-Bound

The US Dollar (USD) trades with a slightly weaker bias on Thursday, hovering near last week’s lows as global markets shift into a wait-and-see mode ahead of Friday’s Nonfarm Payrolls (NFP) data. With limited directional cues during the session, the USD shows little movement across the majors.

While high-beta currencies edge higher, US equity futures remain flat and Treasury yields hold steady, signaling broader investor caution.

Weak US Data Fuels Concerns

Wednesday’s US economic reports did little to bolster confidence in the US economic outlook:

• ISM Services PMI (May): Contracted unexpectedly to 49.9, reflecting a pullback in new orders and rising prices.
• ADP Employment (May): Added just 37K jobs, well below expectations of 114K and marking the lowest reading since early 2021.

While ADP and NFP data do not always align perfectly, the downward trend in both reports is becoming more apparent—raising concerns that Friday’s NFP may also disappoint, adding pressure on the USD.

🗨️ “Tariff uncertainty is starting to bite,” analysts noted, pointing to both the weak hiring data and slowing services sector activity.

USD Outlook Hinges on NFP Risk

Market participants appear to be adjusting expectations ahead of Friday's NFP, with risk tilting toward a softer print, which could undermine the Greenback further—especially amid already dovish Fed expectations and subdued Treasury yields.

Key Levels to Watch:

• Support: DXY at 98.60
• Resistance: DXY near 99.25

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