Dollar slips lower and heads for weekly loss; payrolls offers little support

The U.S. dollar slipped slightly lower Thursday, remaining under pressure and on track for a weekly drop, even after a stronger-than-expected U.S. jobs report.

At 04:30 ET (09:30 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower to 96.700, and on course for a weekly loss of around 1%.

Limited dollar support 

The U.S. currency received limited support from the release of a set of robust jobs numbers on Wednesday, with U.S. job growth unexpectedly accelerating in January and the unemployment rate falling to 4.3%. 

These numbers offered up more signs of U.S. economic resilience, and resulted in traders paring back their Federal Reserve rate cut expectations.

“There is good and bad news for the dollar after yesterday’s payrolls. The good one is intuitive: job numbers were good,” said analysts at ING, in a note.

 “The bad news for the dollar is that it should have rebounded more on the jobs data. Half of the initial USD rally reverted quickly, and that was not due to second thoughts on jobs figures: short-term dollar rates rose and stayed up. We instead read that as a sign markets remain minded to sell USD rallies on the back of longer-term considerations. This means the bar for a USD recovery is higher: more good data is needed, for a start.”

The focus is now squarely on upcoming U.S. consumer price index inflation data, due on Friday, for more cues on the world’s largest economy. Before that, weekly jobless claims data is due later in the session. 

Weak U.K. growth   

In Europe, GBP/USD traded 0.2% higher to 1.3653, with sterling struggling to post gains after data showed the U.K. economy eked out meager growth in the final quarter of 2025.

Gross domestic product grew by 0.1% in the October-to-December period, the same slow pace as in the third quarter, the Office for National Statistics said.

“The U.K. economy ended 2025 on a lackluster note. Though not a huge surprise, the weakness in construction and business investment is particularly eye-catching,” said ING.

“So long as the recent weakness in hiring, coupled with the sharp slowdown in wage growth, continues, we expect a March cut from the BoE, followed by another move in June.”

EUR/USD traded 0.1% higher to 1.1886, helped by the general selloff of the dollar. 

“The support for EUR/USD continues to come almost entirely from strategic USD selling, with little to no contribution from the euro side,” said ING. “EUR/USD may hover around 1.1850-1.1900 for today. We retain a slight preference for the downside, but a flat profile for the near term appears the most likely scenario.”