In the final trading session of the week (October 2nd), the Bloomberg dollar index fell 0.3%, its biggest single-day drop in a month, after US government data showed that non- farm jobs in September 2026 increased by only 29,000, much lower than forecasts in the previous survey. The unemployment rate edged up to 4.2%, from 4.1%.
Earlier in the week, the US dollar strengthened significantly, as high oil prices amid the US-Iran standoff, coupled with growing concerns about fiscal and political risks in France, boosted demand for the dollar as a safe-haven asset. On October 2nd, almost all currencies of the Group of 10 industrialized nations (G10) appreciated against the US dollar. Specifically, the dollar fell 0.3% against the Swiss franc to 0.8285 francs. The dollar also declined 0.15% against the Japanese yen to 157.81 yen. Meanwhile, the euro edged up 0.13% to 1.1258 USD.
Traders say the dollar continues to receive support from U.S. bond yields hovering near multi-decade highs. Growing concerns about fiscal prospects in some European countries and rising oil prices are also supporting the currency. The surge in crude oil prices has prompted some investors to reduce their holdings of currencies of major energy-importing countries, including the euro and the yen.
Dominic Bunning, Head of G10 Foreign Exchange Strategy at Nomura Bank, believes that the employment figures are an ideal set of data. Economic activity remains fairly strong, but is not creating significant inflationary pressure. He considers this a positive context from an overall economic perspective.
This data is likely to be a relatively positive signal for risky assets in general and highly volatile currencies. He also suggested that this data might not have a significant impact on expectations regarding Fed policy, but it could somewhat alleviate the risk of another Fed interest rate hike in October.
Following last month's policy meeting, the Fed raised interest rates and signaled further increases. Fed Chairman Kevin Warsh reaffirmed the independence of monetary policy, despite repeated calls from US President Donald Trump for lower borrowing costs. The market reacted by increasing bets on the Fed continuing to tighten policy.
According to CME Group's FedWatch tool, traders are now betting on an 86% probability that the Fed will keep interest rates unchanged at this month's meeting, up from 36% a week earlier.
This week, the French government announced plans to narrow its budget deficit by cutting spending and increasing tax revenue, raising concerns among investors about the country's public debt situation. Yields on 10-year French government bonds surged on October 1st, reaching their highest level since 2002. The yield spread between 10-year French government bonds and safe-haven German bonds widened to over 150 basis points on October 2nd, the highest level since late 2011, when concerns about France's financial situation and political instability increased.
Analysts at Bank of America believe that despite concerns about risks in France, the euro/Swiss franc pair held firm until this week's sharp sell-off.
Source: https://baotintuc.vn/dong-usd-tang-gia-tuan-thu-ba-lien-tiep-post1391082.html
