By Hani Abuagla, Senior Market Analyst at XTB MENA
The US dollar held steady on Friday after Thursday’s advance. The stronger-than-expected labor market data supported the currency. The reports reinforced the scenario where the Federal Reserve holds its interest rates unchanged in the near future.
Initial jobless claims fell by 9,000, reaching 198,000 claims and contradicting expectations for an increase to 215,000. Continuing claims also declined, extending a downward trend in place since October. Together, these figures suggest labor market conditions remain relatively firm, easing concerns about a rapid deterioration in employment momentum.
Additional support for the dollar came from regional manufacturing surveys. The Philadelphia Fed Manufacturing Index rebounded sharply into expansion territory, posting its strongest reading since September, while the New York Empire State Manufacturing Index also surprised to the upside. These releases helped offset recent concerns raised by softer national manufacturing indicators, pointing to resilience in the industrial sector.
Looking ahead, investor attention will shift to next Thursday’s releases of Q3 2025 GDP and the core PCE inflation data. Signs of sustained economic resilience or persistent price pressures could further underpin the dollar and yields, while weaker-than-expected outcomes may revive expectations for a more accommodative policy path later in the year.