Market Analysis Summary: Rout in the US Dollar – A Warning for Non-Farm Payrolls?
Author: Elior Manier
Date: February 9, 2026
Overview
The US Dollar is experiencing a significant decline as the week begins, with market participants speculating on the potential for dovish Non-Farm Payroll (NFP) results. Recent labor market indicators, including rising jobless claims and disappointing private payroll figures, suggest a weakening labor market.
Key Labor Market Indicators
Last week, jobless claims reached their highest level since early December, and Challenger layoffs have drawn comparisons to the 2008-2009 financial crisis. The ADP private payroll report also surprised to the downside, indicating a potential softening in employment growth.
Jobless Claims Weekly Data since 2025 – Source: FRED
Market Reactions
Despite expectations of a soft NFP number, which typically leads to lower yields, the US yield curve is steepening, indicating market anticipation of lower Federal Reserve rates in the future. However, bond yields remain largely unchanged.
US 10-Year Yields Weekly Chart – Source: TradingView
Currency Movements
The US Dollar is underperforming against major currencies, with the Dollar Index erasing its February gains and approaching a critical support range between 96.50 and 97.00. The current oversold conditions raise questions about whether the dollar's decline is overextended.
Dollar Index (DXY) 4H Chart – Source: TradingView
Commodities and Stocks
In contrast to the dollar's weakness, commodities such as gold are rebounding, with prices rising above $5,000. This increase is attributed to ongoing acquisitions by China, which reflects a cautious stance towards the US Dollar. Additionally, oil prices are stabilizing after a previous drop, with ongoing discussions regarding US-Iran relations influencing market sentiment.
Gold (XAU/USD) 4H Chart – Source: TradingView
WTI US Oil 4H Chart – Source: TradingView
Looking Ahead
With limited data and trends, the current drop in the US Dollar may present opportunities for mean-reversion trades ahead of the upcoming NFP report. Market participants should also monitor retail sales data and inflation figures, as these could significantly impact market dynamics this week.
Conclusion
This week is poised to be a critical test for the markets, with the potential for significant movements based on economic data releases. Traders are advised to stay vigilant and prepared for volatility.
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