FX weekly: Dollar strength holds, major currencies ease
The dollar index (DXY [https://seekingalpha.com/symbol/DXY]), which measures the greenback against a basket of major currencies, was last up 0.31% at $102.25 and remains up 4% for the year to date. DOLLAR WEEKLY MOVES AND KEY DRIVERS: Over the past week, the index added 1.22%, as traders scaled back expectations for an imminent Federal Reserve rate hike following a weaker-than-expected US jobs report [https://seekingalpha.com/news/4648453-us-private-sector-employers-add-90k-in-september-more-than-expected-adp-jobs-report]. The US economy added just 29,000 jobs in September, far below the 90,000 expected, while unemployment rose to 4.2% and wage growth slowed to 3.0%, its weakest since May 2021. Meanwhile, the US dollar also remained firm as elevated Treasury yields boosted the appeal of US assets, while a global bond selloff supported safe-haven demand. U.S. Treasury yields were mixed over the week, with the 10-year yield (US10Y [https://seekingalpha.com/symbol/US10Y#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews]) moving one basis point higher at 5.27%, while the 2-year yield (US2Y [https://seekingalpha.com/symbol/US2Y#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews]) shed 15 basis points to 4.81%. CURRENCY HIGHLIGHTS: Major currency movements (Sep. 28 to Oct. 4) Euro (EUR:USD [https://seekingalpha.com/symbol/EUR:USD]) -1.72% Pound Sterling (GBP:USD [https://seekingalpha.com/symbol/GBP:USD]) -0.33% Japanese Yen (JPY:USD [https://seekingalpha.com/symbol/JPY:USD]) -0.63% Chinese Yuan (CNY:USD [https://seekingalpha.com/symbol/CNY:USD]) -0.09% Swiss Franc (CHF:USD [https://seekingalpha.com/symbol/CHF:USD]) +0.18% Australian Dollar (AUD:USD [https://seekingalpha.com/symbol/AUD:USD]) -1.06% Canadian Dollar (CAD:USD [https://seekingalpha.com/symbol/CAD:USD]) -0.75% Click to enlarge The Australian dollar (AUD:USD [https://seekingalpha.com/symbol/AUD:USD]) was last up 0.14% after the Aussie traded near multi-month lows in the last week as a stronger US dollar and high Treasury yields weighed on the currency. Despite the Reserve Bank of Australia raising rates to 4.6%, softer August inflation reduced expectations of another hike in November. The Euro (EUR:USD [https://seekingalpha.com/symbol/EUR:USD]) was last down 0.48%. Eurozone inflation rose to 3.8%, its highest since September 2023, driven by higher fuel prices. Meanwhile, France’s fiscal concerns continued to weigh on the euro while markets expect the European Central Bank to tighten policy gradually. MORE ON US DOLLAR INDEX, INVESCO DB USD BULLISH ETF, ETC. * European Politics Drag The Euro Lower [https://seekingalpha.com/article/4951958-european-politics-drag-euro-lower] * October 2026 Monthly [https://seekingalpha.com/article/4951840-october-2026-monthly] * September Jobs Data Backs An October Hold: I See A Problem [https://seekingalpha.com/article/4951788-september-jobs-data-backs-an-october-hold-i-see-a-problem] * SOFR swaps market challenges higher-for-longer Fed policy narrative [https://seekingalpha.com/news/4650249-sofr-swaps-market-challenges-higher-for-longer-fed-policy-narrative] * 10-year yield reversal tracks stronger cyclical payrolls, EPB says [https://seekingalpha.com/news/4650257-10-year-yield-reversal-tracks-stronger-cyclical-payrolls-epb-says]