USD index retreats to 108.50 as soft US jobs data dampens rate hike bets

The US Dollar Index has declined 0.4% to 108.50 after weaker-than-expected labor market data reduced expectations for aggressive Fed tightening. Weekly jobless claims rose to 245,000, above the 235,000 forecast, while continuing claims jumped to 1.89 million, suggesting labor market cooling. EUR/USD benefited from dollar weakness, climbing 0.35% to 1.0830, while GBP/USD advanced 0.3% to 1.2680. USD/CHF fell 0.5% to 0.9120 as safe-haven flows favored the Swiss franc amid growth concerns. The softer employment figures have pushed back market expectations for the next Fed rate hike, with futures now pricing only a 65% chance of a March increase versus 80% previously. Technical indicators show the dollar index testing support at 108.30, with resistance at 109.00. Further weakness in upcoming NFP data could accelerate dollar selling pressure.