The euro gained 0.49% against the dollar to $1.1547

The U.S. dollar dropped against the euro and Swiss franc for a second straight session on Thursday as data showed weakness in the U.S. labour market, increasing expectations of another rate cut this year.

Meanwhile, sterling rose after the Bank of England kept rates unchanged ahead of this month’s budget. The central bank had been expected to leave rates unchanged, although markets had attached a one-in-three probability of a cut earlier on.

U.S.-based employers cut more than 150,000 jobs in October, marking the biggest cut for the month in over 20 years, a report by Challenger, Gray & Christmas said on Thursday as industries adopt AI-driven changes and intensify cost cuts.

Economic data from private sources has drawn increased investor interest amid the absence of official data during the U.S. government’s longest-ever shutdown.

Thursday’s weakness for the dollar follows a strong rally that started last week after the U.S. central bank tempered expectations for additional cuts this year amid limited economic data, persistent inflation, and internal disagreement among policymakers.

The move lower in the dollar this morning was largely anticipated, Antonio Ruggiero, FX & macro strategist at Convera, said.

The lack of data from the government shutdown led investors to inflate optimism around the U.S., he said.

When figures like the Challenger layoff report emerge, they easily trigger fear among investors who remain unconvinced about the durability of improved USD sentiment. That’s enough to prompt position unwinds, driving the dollar lower, Ruggiero said.

Traders now see a 69% probability of a December rate cut, up from 62% the previous day, according to CME FedWatch. However, this remains well below the roughly 98% odds priced in late October.

The euro gained 0.49% against the dollar to $1.1547, while the dollar slid 0.42% to 99.70 against major rivals, including the common currency.

Against the Swiss franc, the dollar dropped 0.49% to 0.806 and was down 0.66% against the yen to 153.09 yen, pulling back from the near nine-month high of 154.48 yen hit on Tuesday.