The U.S. dollar traded largely unchanged against major currencies, including the yen and the euro, on Wednesday as investors digested a fresh round of U.S. labor market data and weighed its implications for monetary policy.
Recent figures from the U.S. Labor Department showed that job openings declined more than expected in November, while hiring also slowed, pointing to continued easing in labor demand.
Other indicators painted a mixed picture. Data from the Institute for Supply Management showed U.S. services sector activity unexpectedly strengthened in December. At the same time, private payroll growth rebounded less than forecast, according to the latest national employment report from ADP.
Investor attention is now turning to Friday’s nonfarm payrolls report, which is considered the most comprehensive gauge of U.S. labor market conditions.
In currency markets, the dollar rose slightly against the Swiss franc and slipped marginally against the Japanese yen. Olivier Bellemare, vice president of options trading and structured products at Monex Canada, said recent dollar moves appear tactical rather than driven by firm policy signals. He added that markets are waiting for clearer employment data to assess inflation persistence and determine the dollar’s next direction.
Elsewhere, oil prices fell as China criticized the United States following reports that Washington had persuaded Venezuela to redirect oil supplies away from Beijing. The dollar index, which tracks the greenback against a basket of major currencies, edged slightly higher on the day.
The euro weakened modestly after falling in the previous session, as softer-than-expected German inflation data prompted traders to scale back expectations for an early interest rate hike. Markets have largely priced in stable policy rates through 2026, while anticipating tighter policy from the European Central Bank in 2027 if inflation pressures re-emerge.
Meanwhile, geopolitical tensions between China and Japan moved back into focus after Beijing banned exports of certain dual-use items to Japan. Strategists said the move had little immediate impact on currency markets but weighed on Japanese equities. Some analysts noted that rising regional tensions could encourage the Bank of Japan to proceed cautiously with future rate hikes.
In the Asia-Pacific region, the Australian dollar climbed to its highest level since October 2024, supported by a mixed inflation report that kept hopes of a near-term rate increase alive. The New Zealand dollar, by contrast, edged lower.
