US Dollar Index Climbs Above 100 Near Five-Month Peaks Ahead of September NFP Report
By Akhtar Faruqui, FXStreet – November 20, 2025
The US Dollar Index (DXY) continued its upward momentum, trading above the 100 mark near its highest levels in five months early Thursday during Asian trading hours. Currently hovering around 100.30, the index has extended its winning streak to a fifth consecutive session as market participants await the imminent release of the US September Nonfarm Payrolls (NFP) report, a key indicator that could further influence Federal Reserve policy expectations.
DXY Gains Ground Before Critical Employment Data
The US Dollar Index, which gauges the performance of the US Dollar (USD) against six major world currencies, gained more than 0.5% during the previous session. It challenged the November 5 high of 100.36, highlighting growing investor interest in the greenback amid a cautious Federal Reserve outlook.
The US Bureau of Labor Statistics (BLS) announced it will not publish the customary October employment report due to the unavailability of household survey data for retroactive collection. This missing data segment will be incorporated into a combined November report instead, a development that has also brought added focus on the September figures.
Fed Officials Remain Divided on December Rate Cut
The recent Federal Open Market Committee (FOMC) October 28-29 meeting minutes shed light on the Fed officials’ divided stance and measured approach toward the path of interest rates. While most policymakers agreed that future rate reductions would likely be appropriate over time, some officials expressed reservations about an immediate cut during December’s policy meeting.
The mixed signals have led markets to scale back on expectations of a December rate reduction. The CME FedWatch Tool currently prices in just a 33% probability of a 25-basis-point Fed rate cut next month, a significant decrease from the 63% chance estimated just a week ago.
Understanding the US Dollar’s Movements and the Fed’s Role
The US Dollar remains the world’s most traded currency, forming roughly 88% of global foreign exchange transactions according to 2022 data. Its value is heavily influenced by monetary policy set by the Federal Reserve, balancing its dual mandate to control inflation and sustain full employment primarily through interest rate adjustments.
When the Fed hikes rates to temper inflation above the 2% target, the US Dollar typically strengthens. Conversely, rate cuts aimed at stimulating employment or below-target inflation often weaken the greenback.
In extraordinary circumstances, the Fed can undertake quantitative easing (QE) — increasing money supply by purchasing government securities to stimulate liquidity — which tends to depreciate the dollar. The opposite process, quantitative tightening (QT), curtails these actions and usually supports a stronger US Dollar.
Looking Ahead: Impact of September NFP and Fed Outlook
Market participants closely monitor the upcoming September NFP data for insight into the US labor market’s strength and potential guidance on future Fed moves. Given the delay of the October report, September’s employment figures gain even stronger importance this month.
Traders will also be evaluating the Fed’s communication for clarity on how cautious or confident officials are about economic conditions ahead, particularly in light of the mixed feedback from the October FOMC minutes.
As the US Dollar consolidates gains and tests key technical levels near 100, its trajectory in the near term will likely hinge on interpretation of these labor market dynamics and policy signals from the Federal Reserve.
About the Author
Akhtar Faruqui is a Forex analyst based in New Delhi, India, known for his insightful analysis of global currency markets and macroeconomic trends.
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