Mixed US data keep Dollar gains in check ahead of payrolls – ING

This week has so far sent conflicting US macro signals: good ISM services, acceptable ADP, and bad JOLTS. Challenger job cuts released yesterday dropped significantly in December, but that’s partly due to the concentration of large corporation layoffs in previous months. For the whole of 2025, job cuts rose 58% and at 1.21 million were the highest since 2020, ING’s FX analyst Francesco Pesole notes.

SCOTUS tariff ruling could deliver a modest USD boost

“That, anyway, has underpinned some cautiously growing optimism about today’s payrolls. The whisper number reported by Bloomberg has risen from 50k to 65k in the past two days, with economists’ consensus at 70k. The unemployment rate may be monitored even more than payrolls, mirroring the Fed’s focus on joblessness. It’s expected to slow back to 4.5% from 4.6%, which, combined with 50-100k payrolls, would be enough to fully rule out a January cut and keep the probability of a March cut below 50%. Our house call is 50k for payrolls and 4.5% for unemployment. We suspect some of yesterday’s dollar strength was driven by such expectations, and we doubt the greenback has much further to rally unless numbers are materially stronger than consensus.”

“On the second topic, many expect the Supreme Court to rule on Trump’s tariffs today, though that’s not guaranteed. Trump’s recent flurry of public remarks defending tariffs suggests he’s bracing for a decision and that the ruling could be negative – Polymarket prices that outcome at 77%. If SCOTUS declares IEEPA tariffs unlawful, the administration will almost certainly seek ways to reinstate them. Bessent has flagged Section 232 or 301 as options, though both add complexity; Sections 338 and 122 are also possible, while congressional approval remains the cleanest route.”

“Meanwhile, US importers who paid these tariffs would be able to pursue refunds – a matter SCOTUS should, however, leave to lower courts. Overall, this scenario could be interpreted by markets as easing inflation pressures and improving corporate profitability, while at the same time worsening the fiscal outlook and reducing expectations for Trump’s proposed ‘tariff dividend’ stimulus. Net-net, this could be a moderate dollar positive. That’s because the Fed has been more focused on growth and jobs than inflation, which hasn’t picked up dramatically with tariffs, and could therefore feel less pressure to ease.”