Dollar Falls to Lowest Since October as Data Clouds Fed Path

The U.S. dollar slid to its weakest levels since early October on Wednesday, slipping below a key technical threshold as markets digested delayed labour and retail data that left the Federal Reserve’s near term policy path unclear. The dollar index fell beneath 98.1 during the Asian session, touching a low not seen in roughly two and a half months as traders weighed a stronger than expected payroll figure against a surprising rise in unemployment and flat consumer spending.

U.S. payrolls rose by 64,000 in November, above consensus expectations, yet the October employment figure was revised down by 105,000 and the unemployment rate unexpectedly climbed to 4.6 percent, its highest reading since 2021. Retail sales in the latest release were broadly flat, with weakness concentrated at auto dealers and gasoline stations while other categories showed firmer spending. The reports were published late after a 43 day federal government shutdown interrupted the usual data calendar, adding volatility to market interpretation.

The mixed set of readings produced a broadly softer greenback against major currencies. The dollar eased versus the British pound and the Japanese yen, and slipped marginally against the euro. One bilateral quote showed the dollar trading near 0.79435 Swiss francs, down about 0.26 percent. Market pricing continued to reflect expectations that the Federal Reserve may have room to cut the funds rate next year, with traders still assigning value to as many as two cuts in 2026.

John Velis, Americas FX and macro strategist at BNY, said, “The data was mixed, there were some good signs in hiring and a little better than expected, but not massively so.” His comment reflects the market caution that a single stronger payroll number is not sufficient to override the signal from rising unemployment and flat retail outlays, particularly given the data disruption caused by the shutdown.

Policy divergence among major central banks is amplifying cross currency moves. The Bank of England is widely expected to cut borrowing costs by 25 basis points in coming weeks, the European Central Bank is anticipated to hold rates steady, and the Bank of Japan is set to raise interest rates. That mix of expected decisions tends to support the pound and the yen versus the dollar, while a dovish turn in the United States would further pressure the greenback.

For investors and policymakers the key question is whether the November figures mark a transient distortion from delayed data releases, or an inflection in the labour market that alters inflation dynamics. Markets will focus on upcoming inflation readings, Fed officials’ remarks, and any further revisions to employment statistics to determine whether the central bank will delay, accelerate, or maintain a path toward rate cuts. In the near term a softer dollar may support commodity prices and risk assets, while households and fixed income investors watch for changes in borrowing costs tied to the evolving policy outlook.