The dollar is heading for a fourth consecutive weekly gain against the euro
Amman3 min read
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The dollar is heading for a fourth consecutive weekly gain against the euro on Friday, supported by rising U.S. Treasury yields amid selling in European government bond markets and expectations that the Federal Reserve will maintain its hawkish stance on interest rates.
The U.S. currency gave up some of its recent gains after data showed U.S. job growth in September fell short of economists' expectations and the unemployment rate rose slightly to 4.2%. The yield on the benchmark 10-year U.S. Treasury note fell after the report, registering at 5.191% in the latest trading.
However, the dollar remained supported by U.S. bond yields hovering near their highest levels in decades, as well as growing concerns about the financial outlook in some parts of Europe and rising oil prices. The increase in crude prices led some investors to reduce their exposure to currencies of energy-importing countries, including the euro and the yen.
The euro is heading for a fourth consecutive weekly loss against the U.S. dollar, marking the longest such streak since mid-May 2025. The euro rose 0.39% to $1.1285 in the latest trading.
Dominik Panning, head of strategy for the top 10 foreign currencies at Nomura in London, said, "When I look at the (job) data as a whole, I see it as balanced numbers. Economic activity remains strong and flexible, but it does not generate significant inflationary pressure."
He added, "This scenario is positive from a general economic perspective. The figure is expected to be relatively good for high-risk assets in general. Although it may not have a significant impact on market expectations regarding the Federal Reserve's decisions, it slightly reduces the likelihood of a further interest rate hike in October."
The U.S. Federal Reserve raised interest rates and hinted at further increases after its monetary policy meeting last month. Federal Reserve Chairman Kevin Warsh emphasized the independence of the Board, despite repeated calls from U.S. President Donald Trump to lower borrowing costs, which reinforced market expectations of further monetary tightening.
The CME Group's FedWatch tool indicates that investors expect an 86% chance that the Federal Reserve will keep interest rates unchanged later this month, compared to 36% a week ago.
The dollar fell 0.49% against the Swiss franc to 0.827, but it is still on track for a sixth consecutive weekly gain, the longest such streak since November 2024.
The dollar declined 0.33% against the Japanese yen to 157.55 yen, but it is heading for a third consecutive weekly increase.
The U.S. dollar index, which measures the performance of the U.S. currency against a basket of currencies including the yen and the euro, fell 0.29% to 101.68 points, heading for a third consecutive weekly gain.
