• The DXY Index shows losses, trading near the 103.05 area.
• Weekly Jobless Claims came in higher than expected.
• Markets still digesting Wednesday’s Fed decision and Powell's words.

The US Dollar (USD) is currently trading at 103.05, with a declining trend, largely triggered by the release of soft labor market data on Thursday that outshadowed strong ISM PMIs figures. Markets are still digesting Federal Reserve (Fed) chair Jerome Powell’s words from Wednesday, which helped the index jump toward 103.80.

Fed Chair Powell reinforced the idea that a rate cut in March is unlikely despite ongoing market speculation. Nevertheless, he noted rate adjustments remain primarily data-dependent, with upcoming jobs data setting the pace of the US Dollar and expectations for the short term.

Daily Digest Market Movers: US Dollar declines following weak labor market figures

• The ISM Manufacturing PMI for January came in at 49.1, lower than the consensus estimate of 47 but slightly higher than the previous figure of 47.1.
• The initial Jobless Claims for the week ending in January 27 reported by US Department of Labor are at 224K, higher than the consensus forecast of 212K and the previous figure of 215K.
• Investors are keenly awaiting the January Nonfarm Payrolls report due on Friday to continue placing their bets on the next Fed decisions. 
• As for now, markets are seeing the easing cycle starting in May, but the odds of a cut in March are still high around 40%, according to the CME FedWatch Tool.
• In case Friday’s labor market figures come in weaker than expected, the dovish bets on the Fed may rise, applying further pressure on the USD