Dollar Hits 17-Month High; Will It Continue to Rise on the Back of U.S. Employment Data?

Dollar Hits 17-Month High; Will It Continue to Rise on U.S. Employment Data?

02.10.2026 New

In the U.S. currency market the previous day, the U.S. dollar strengthened against major currencies as the yield on the 10-year U.S. Treasury note briefly rose to 5.344%, its highest level since 2002.Although short-term interest rates subsequently fell following cautious remarks from Fed officials, the Dollar Index remains near its highest level since April 2025, trading at 102.08 today.The dollar traded around 158.13 yen against the yen, while the Australian dollar fell to $0.6918—its lowest level in three months—and the New Zealand dollar also dropped to $0.5591.U.S. initial jobless claims came in at 197,000, below expectations, marking the third consecutive week below 200,000 and indicating that layoffs remain low.

Against the backdrop of concerns over France’s fiscal situation and turmoil in the European bond market, selling pressure on the euro intensified, with the euro-dollar exchange rate briefly hitting $1.1215—its lowest level since May 2025.The yield on the French 10-year bond rose to its highest level in a long time, and the yield spread between German and French government bonds has also widened significantly. On the other hand, the eurozone’s September manufacturing PMI rose to 52.9 from 52.7 the previous month, reaching its highest level in more than four years, indicating that the economy remains resilient.The GBP/USD pair is also trading near a three-month low of $1.3187, and today we will be watching to see if selling pressure on European currencies eases in response to the eurozone inflation data.

Today’s economic indicators include the preliminary September HICP for the eurozone at 6:00 p.m. and the September U.S. nonfarm payrolls, unemployment rate, and average hourly earnings at 9:30 p.m.The Eurozone HICP is expected to come in at 3.7% year-over-year, with the core HICP at 2.5%; if inflation comes in higher than expected, speculation about further ECB rate hikes could support the euro. U.S. nonfarm payrolls are forecast to rise by 88,000, with the unemployment rate at 4.1% and average hourly earnings up 0.3% month-over-month.Given that the market is pricing in a lower probability of a U.S. rate hike in October, we will be watching to see if strong wage and employment data trigger a resumption of dollar buying.