The movements of the U.S. dollar stabilized during early trading on Friday, and it quickly recorded a strong jump following the release of the U.S. labor market data for September.

In this regard, official data showed a decrease in the unemployment rate from 4.2% to 4.1% during September, as well as revealing an increase in the number of jobs added by the U.S. economy by 254,000 jobs, while expectations had estimated the creation of only 140,000 new jobs.

Additionally, the previous reading of the non-farm payrolls was revised to show an increase of 159,000 new jobs for August instead of 142,000 jobs.

The developments in the labor market were at the forefront of the priorities of the U.S. Federal Reserve, especially after two months of noticeable weakness; which raised doubts about the state of economic activity in the U.S., stirring market fears during the past trading sessions.

Moreover, it seems that the U.S. Federal Reserve accelerated the step to start a rate-cutting cycle in the September meeting; to avoid causing unnecessary harm to the U.S. economy, which led to a decline in the dollar at that time.

Furthermore, recent Federal statements have emphasized the need to monitor labor market developments and their implications for future monetary policy; but these data came to strengthen investor confidence in the U.S. economy and increased the likelihood that the U.S. Federal Reserve would not rush into significant or faster rate cuts; this bolstered the rise of the dollar.

In this context, the CME Group's federal funds rate tracker indicates that markets see a 92.5% chance that the U.S. Federal Reserve will cut rates by 25 basis points at the upcoming November meeting, providing clear support for dollar trading today.

Daily and Weekly Performance of the U.S. Dollar Movements

Looking at today’s currency market trading; it can be observed that the dollar index – which measures the dollar's performance against a basket of other currencies – rose by about 0.48% to reach 102.43 points.

On a weekly basis, the dollar is on track to achieve its largest weekly gains since September 2022, continuing its series of daily gains for the fifth consecutive session, as the total dollar gains since the first trading of the week up to now are approximately 2.03%.