USD Weakens as Jobs Data Shapes Fed's 2026 Monetary Policy Path

The US dollar has come under pressure across major pairs following the release of critical employment data that is expected to influence the Federal Reserve's monetary easing trajectory through 2026. While specific job numbers were not immediately available, market participants are interpreting the data as supportive of a more dovish Fed stance, triggering dollar selling. EUR/USD has pushed higher toward 1.0950, while GBP/USD tests resistance near 1.2700. USD/JPY retreated from recent highs, sliding below 150.00 as safe-haven flows returned to the yen. The employment report's implications extend beyond immediate price action, as traders recalibrate expectations for the Fed's rate cutting cycle in 2026. Technical indicators suggest the dollar index (DXY) faces key support at 104.50, with a break below potentially accelerating the downtrend. Currency traders should monitor upcoming Fed communications for clarity on how today's data influences their long-term policy framework.