Dollar Edges Higher After Mixed US Jobs Report: Key Takeaways for 2026

• How Did the Dollar React to the US Jobs Data?
• What Were the Key Metrics in the Report?
• Will the Fed Pause Rate Cuts in Early 2026?
• How Are Markets Interpreting the Data?
• What’s the Historical Context?
• Expert Takeaways
• *

The dollar saw a slight uptick against the euro following a mixed December 2025 US jobs report, with weaker-than-expected job creation but a drop in unemployment. Analysts weigh in on the Fed’s likely pause in rate cuts amid a still-resilient labor market. Here’s what you need to know.

How Did the Dollar React to the US Jobs Data?

The dollar gained 0.17% against the euro, trading at 0.8592 EUR/USD after the December 2025 jobs report showed 50,000 new jobs—below the expected 60,000. While hiring slowed, the unemployment rate dipped to 4.4% (from 4.5%), signaling underlying labor market strength. "This isn’t a collapse, just a cooldown," notes the BTCC research team.

What Were the Key Metrics in the Report?

Beyond the headline numbers:

• Unemployment: Fell to 4.4% (vs. 4.5% expected), nearing pre-pandemic lows.
• Wages: Rose 0.3% monthly, pushing annual growth to 3.8%—a hawkish signal for inflation watchers.

Source: TradingView labor market analytics

Will the Fed Pause Rate Cuts in Early 2026?

Most analysts think so. "The probability of a January rate cut is now NEAR zero," says Christophe Boucher of ABN Amro. The Fed’s prior three cuts were preemptive, but with unemployment this low, inflation may retake center stage. BTCC’s chief strategist adds: "The Fed can afford to wait—this isn’t an emergency."

How Are Markets Interpreting the Data?

Futures markets now price in just a 15% chance of a March 2026 cut (down from 35% pre-report). The 10-year Treasury yield jumped 8 basis points, while gold dipped 0.9%. On BTCC’s crypto exchange, bitcoin held steady—traders seem to view this as a "neutral" outcome for risk assets.

What’s the Historical Context?

Since 2020, unemployment below 4.5% has consistently delayed Fed easing cycles. The last time rates were cut amid sub-4.5% joblessness was during 2019’s "mid-cycle adjustment"—a scenario some see repeating if inflation keeps decelerating.

Expert Takeaways

Bastien Drut (CPR AM) expects the FOMC to "keep an accommodative bias," while DWS’s Christian Scherrmann argues: "At 4.4% unemployment, the Fed should stay neutral—no rush to act." Consensus? A prolonged pause, with cuts likely back on the table only if Q1 2026 data disappoints.

*

Why did the dollar rise despite weak job growth?

The drop in unemployment and steady wage growth outweighed the hiring slowdown, suggesting the economy isn’t faltering enough to warrant imminent rate cuts.

How might this affect crypto markets?

Historically, Fed pauses correlate with sideways crypto action—as seen today with BTC’s stability. BTCC data shows altcoins may underperform in such environments.