Weak dollar rebounds, can an employment report change the situation?

The recent rise of the US dollar appears to be unstable. Despite recent weak economic data, the dollar has risen slightly, but this upward momentum may be just a fleeting moment. According to the latest news, analysts believe that unless Friday’s non-farm payroll report shows strong performance, the dollar’s current upward potential is limited.

Why is the US dollar in a “fragile state”

XS.com broker analyst Rania Gule pointed out that the dollar is in a fragile state. This judgment is based on the following aspects:

• Poor signals from the labor market: Any signs of further weakness in the labor market could push the dollar lower, indicating that employment data has become a key factor supporting the dollar
• Recent economic data performance is not ideal: Although not all data has been released, the market has already reflected concerns about the economic outlook
• Lack of certainty among investors: The market is waiting for clearer economic signals rather than rushing to chase gains

Critical moment: the role of the non-farm payroll report

The non-farm payroll report on Friday (January 10) will be crucial in determining the future direction of the dollar. The importance of this report is reflected in two scenarios:

Investors’ true mindset

According to the latest news, although the dollar has risen slightly, this more reflects investors’ cautious stance rather than optimism about the dollar’s prospects. This “holding and waiting” attitude indicates that the market is still waiting for clearer economic signals.

From the perspective of the cryptocurrency market, the dollar’s movement directly affects assets like BTC that are denominated in USD. The dollar’s fragility could provide some support for crypto assets—if the dollar falls due to weak employment data, investors may seek other assets to hedge.

Summary

The current rise of the dollar seems strong but is actually fragile. Weakness in the labor market has become a sword hanging over the dollar, and Friday’s non-farm payroll report will determine whether this sword falls. Investors’ current cautious attitude reflects a lack of certainty in the market—common during periods of mixed macroeconomic data and unclear policy expectations. In the short term, the dollar’s direction depends on whether employment data can beat expectations; in the long term, the overall health of the labor market will determine the dollar’s true support.