The U.S. dollar traded choppy and mixed throughout Tuesday, closing with a net bearish lean against major currencies, likely a reaction to noisy U.S. employment data showing a softening labor market.
During the Asian session, the dollar traded with arguably a net bullish lean, possibly reflecting overnight positioning as traders awaited the delayed U.S. jobs data. The moves were choppy and mixed across currency pairs, with no significant regional catalysts driving clear directional momentum.
The London session brought an arguably net bearish shift for the dollar. European session data came in heavy, led by the UK labor market report. It showed unemployment ticking higher to 5.1% from 5.0% as expected, with payrolls declining once again, yet wage growth surprised to the upside. The pound strengthened on a slightly hawkish repricing as total easing expected for 2026 pulled back from 64 bps to 56 bps. The euro-area Composite PMI slipped to 51.9 from 52.8 in November, with Germany’s industrial sector unexpectedly deteriorating, yet the dollar failed to capitalize meaningfully on European weakness, suggesting broader dollar softness was the dominant force.
The U.S. session saw the dollar continue its net bearish trajectory early on following the delayed employment data release, before recovering slightly to trade choppy and sideways for the remainder of the session. The November payrolls figure of 64,000 came in above the 25,000 forecast, while October’s reading was revised sharply lower to -105,000 from 119,000, with government payrolls contracting by 157,000 versus the -35,000 forecast—reflecting the effects of the 43-day government shutdown from October 1 to November 12, 2025–the longest government shutdown in U.S. history.
Despite the mixed employment data, the dollar’s weakness appeared to reflect market positioning that aligned with several Fed officials’ and strategists’ assessments that the October/November data is too distorted by the shutdown to meaningfully inform near-term policy decisions. Fed’s Bostic said he continues to view price stability as the clearer and more pressing risk and expects inflation to remain above 2.5% even at the end of 2026, though his hawkish stance didn’t prevent the dollar’s modest decline.
At Tuesday’s close, the dollar traded mixed but arguably net bearish against major currencies, with traders likely positioning for December’s employment report—expected in early January—which should provide cleaner signals for Fed policy trajectory.
Upcoming Potential Catalysts on the Economic Calendar
- Japan Machinery Orders for October 2025 at 11:50 pm GMT
- Japan Balance of Trade for November 2025 at 11:50 pm GMT
- Australia Westpac Leading Index for November 2025 at 12:00 am GMT
- U.K. Inflation Updates for November 2025 at 7:00 am GMT
- Germany Ifo Business Climate for December 2025 at 9:00 am GMT
- Euro area Wage Growth for September 30, 2025 at 10:00 am GMT
- Euro area Inflation Rate Final for November 2025 at 10:00 am GMT
- U.K. CBI Industrial Trends Orders for December 2025 at 11:00 am GMT
- U.S. MBA 30-Year Mortgage Rate & Applications for December 12, 2025 at 12:00 pm GMT
- U.S. MBA Mortgage Applications for December 12, 2025 at 12:00 pm GMT
- U.S. Fed Waller Speech at 1:15 pm GMT
- Canada Foreign Securities Purchases for October 2025 at 1:30 pm GMT
- Swiss SNB Quarterly Bulletin at 2:00 pm GMT
- U.S. Fed Williams Speech at 2:05 pm GMT
- U.S. EIA Crude Oil Stocks Change for December 12, 2025 at 3:30 pm GMT
- U.S. Fed Bostic Speech at 5:30 pm GMT
Wednesday’s calendar features UK inflation data that could influence Bank of England rate cut expectations following Tuesday’s stronger-than-expected wage growth, while Germany’s Ifo Business Climate may provide further insight into European economic momentum after disappointing manufacturing PMI readings. Multiple Fed speakers—including Waller, Williams, and Bostic—could offer clarification on how policymakers are interpreting the distorted October/November employment data and whether December’s cleaner report will drive the next policy move.
Markets remain sensitive to any fresh commentary on the balance between inflation persistence and labor market cooling, particularly following Tuesday’s mixed signals from the delayed jobs data that most analysts expect the Fed to look through.
Stay frosty out there, forex friends, and don’t forget to check out our Forex Correlation Calculator when planning to take on risk!
