December job openings hit their lowest level since 2020, and a surge in unemployment claims has raised the odds of a March cut from 10% to 30%.
The US dollar weakened sharply as expectations of a Federal Reserve interest rate cut rose sharply. In Asian foreign exchange markets today, the Singapore dollar rose 0.1% against the US dollar, reaching 1.2738 Singapore dollars per US dollar.This comes as concerns about a weakening labor market grew after the US employment figures released the previous day (the 5th) fell significantly short of market expectations. The US Department of Labor reported that the number of job openings (JOLTS) for December reached 6.542 million, the lowest level since 2020.
Weekly new unemployment claims also rose more than expected. Corporate layoffs in January 2026 reached their highest level since the 2009 global financial crisis, and companies' hiring intentions fell 13% year-over-year.
The odds of a March interest rate cut have tripled.
Market analysts analyzed that "the bets on a rate cut have been reignited as the labor market shows weakness again."
In fact, the probability of a March rate cut, as predicted in the swaps market, jumped from 10% to 30% this Monday. Some indicators, including the CME FedWatch, even put the probability at 22.7%.
The U.S. Treasury market also reacted immediately to expectations of a rate cut. U.S. Treasury yields fell 8 basis points (basis points, 1 basis point = 0.01 percentage point).
Asian currencies strengthen alongside a weak dollar
As expectations of interest rate cuts grow, the investment appeal of dollar-denominated assets has weakened. Lower interest rates lower the yields on dollar deposits and bonds.
According to Reuters LSEG data, the U.S. dollar weakened across the board against major currencies, with Asian currencies, including the Singapore dollar, also strengthening.
Foreign exchange market experts predicted that "the slowdown in the U.S. labor market could bring forward the Fed's shift in monetary policy," and that "if the non-farm payroll data to be released next week shows further weakness, the timing of the interest rate cut could be brought forward even further."
Positive outlook for Asian exporters, including Korea
A weaker US dollar is expected to create a favorable environment for Asian exporters, including South Korea. A weaker dollar will lead to a stronger Korean won and other Asian currencies, easing the burden of import prices and enhancing the competitiveness of exports to the US.
However, some are raising concerns that the U.S. economic slowdown could lead to a decline in global demand.
The market is focusing on the US January employment report, scheduled for release on the 13th (local time). If the employment slump continues, the likelihood of a Fed rate cut in March will increase.
Joohoon Choi joohoon@blockstreet.co.kr
