The US Dollar Index is holding just below its 2026 high near the 101.50-101.80 band on Thursday, as EUR/USD slides to its lowest level since May 2025 ahead of a heavy slate of US data.
Executive Summary:
- The US Dollar Index (DXY) trades near 101.60-101.70, within striking distance of its 2026 high around 101.80.
- EUR/USD has fallen to 1.1316, its lowest level since May 2025, down more than 2% over the past month.
- Thursday’s ISM Manufacturing PMI and weekly jobless claims are the next catalysts that could decide whether the dollar breaks higher into Friday’s payrolls report.
Macro Breakdown: The dollar’s advance has been built on a specific combination of recent data: softer core PCE inflation has been more than offset by stronger ADP private payrolls and an upward revision to US economic growth, a mix that keeps the Federal Reserve’s policy path looking less dovish than markets had priced only weeks earlier. That recalibration has widened the perceived rate gap between the US and most other major economies, which is the direct mechanical driver behind the dollar’s broad-based strength this week. Thursday’s ISM Manufacturing PMI, expected around 54.8-54.9 versus 54.6 previously, along with jobless claims expected near 199,000, are being treated as the next real test of whether that growth narrative continues to hold up.
Social Proof: A dedicated, multi-attempt search for an authoritative X/Twitter post specifically covering this week’s dollar strength did not surface a source meeting our sourcing standard that was clearly tied to the current move rather than an older, since-superseded dollar forecast — no embed is included here rather than risk citing outdated commentary.
Currency Pair & Market Impact: EUR/USD’s slide to a 17-month low is the clearest casualty of dollar strength this week, with the pair now down over 3% on a 12-month basis as European growth data continues to lag the US. The broader dollar strength is also weighing on other majors, with most G10 currencies trading on the back foot against the greenback heading into Thursday’s data. A strong ISM print could push DXY through 101.80 toward its next technical resistance, while a miss would likely trigger a sharper pullback given how much bullish positioning has already built up around current levels.
Forward-Looking Outlook: Friday’s non-farm payrolls report is now the dominant risk event on the calendar, with today’s ISM and claims data serving mainly as a preview of underlying labor market momentum. A dollar that is already trading near its highs for the year has less room for a disappointing print to be shrugged off than it would during a more neutral positioning backdrop, meaning Friday’s reaction could be sharper in either direction than the past several payrolls releases.
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