USD: Mixed US figures limit Dollar’s advance as markets await payrolls – ING

Mixed Signals from Recent US Economic Data

This week has produced a range of US economic indicators that paint a mixed picture. The ISM services report showed strength, the ADP employment data was solid, but the JOLTS job openings disappointed. According to ING FX analyst Francesco Pesole, Challenger job cuts in December dropped sharply, though this was partly because major layoffs had already occurred in previous months. Looking at 2025 as a whole, job cuts climbed by 58%, reaching 1.21 million—the highest level since 2020.

Potential Impact of Supreme Court Tariff Decision on the US Dollar

There is a sense of cautious optimism ahead of today’s payroll numbers. Bloomberg’s “whisper number” for job gains has increased from 50,000 to 65,000 over the past two days, while economists are forecasting 70,000. The unemployment rate is expected to dip back to 4.5% from 4.6%, which, if paired with payroll growth between 50,000 and 100,000, would likely rule out a rate cut in January and keep the odds of a March cut below 50%. Our own projection is for 50,000 new jobs and a 4.5% unemployment rate. Some of the recent strength in the dollar may reflect these expectations, but unless the data significantly beats forecasts, further gains for the greenback seem limited.

Attention is also on the Supreme Court, which may issue a ruling on Trump-era tariffs today, though this is not certain. Trump’s recent public defense of tariffs suggests he is preparing for a potentially unfavorable decision, with prediction markets assigning a 77% chance of such an outcome. Should the Court find the IEEPA tariffs unlawful, the administration is likely to explore alternative legal avenues—such as Sections 232 or 301, though these are more complex, or possibly Sections 338 and 122. Ultimately, congressional approval would offer the most straightforward solution.

If the ruling allows US importers to seek tariff refunds, this issue would likely be handled by lower courts. Markets could interpret this scenario as easing inflationary pressures and boosting corporate earnings, but it might also worsen the fiscal outlook and dampen expectations for Trump’s proposed “tariff dividend” stimulus. On balance, this could provide a mild lift to the dollar, since the Federal Reserve has prioritized employment and growth over inflation, which has not surged in response to tariffs, reducing the urgency for monetary easing.