US Dollar Firms as February Payrolls Show Unexpected Job Losses

The US dollar maintained its strength against major currencies following an unexpected drop in February payrolls, signaling a potential earlier shift in Federal Reserve interest rate policy.

The economy shed 92,000 jobs last month, a significant reversal from January's revised gain of 126,000. The unemployment rate climbed to 4.4 percent. This figure fell short of economist expectations for a 59,000 job increase.

Analysts suggest the weak payroll report provides fodder for Federal Reserve "doves," though some of the decline may be attributed to temporary healthcare sector strikes. Despite the soft employment data, robust US economic growth is expected to eventually drive sustained labor demand.

In early trading, the dollar saw modest gains against the yen and the broader dollar index also edged higher. The euro experienced a slight decline against the dollar.

Following the jobs report, US rate futures now anticipate Federal Reserve rate cuts commencing in September, a shift from previous forecasts of October. The market anticipates approximately 40 basis points of easing in 2026.