The dollar fell on Friday after a report showed the US added fewer jobs than expected in September, leading traders to trim bets the Federal Reserve will raise interest rates this year. The Bloomberg Dollar Spot Index declined as much as 0.4% after government figures showed that nonfarm payrolls increased 29,000 last month, compared with a median forecast of 90,000 in a Bloomberg survey of economists. The unemployment rate edged up to 4.2%, from 4.1%. Following the data, traders are no longer fully pricing in a Fed hike before year-end and see less than a 20% chance of a boost this month.
The dollar rallied earlier this week as elevated oil prices amid the US standoff with Iran and heightened concern over fiscal and political risks in France boosted demand for the greenback as a haven. Nearly all currencies in the Group of 10 gained against the greenback on Friday. "It’s a mixed report, enough to keep Fed hike pricing at bay but not so bad that it dents US growth expectations," said Erik Nelson, a strategist at Wells Fargo. "The dollar weakness reaction should fade and attention turns back to European risk premia."
This week, France’s government unveiled plans to narrow the budget deficit by limiting spending and raising tax revenue, stoking investor concern over the country’s debt. The euro rose 0.2% on Friday, leaving it down more than 1% this week against the US currency. Societe Generale’s chief currency strategist, Kit Juckes, said the lack of a resolution in the Middle East, which is boosting energy prices, is “clearly euro-negative and dollar-positive in the short term." The dollar was still up about 0.7% on the week, for a third straight week of gains, its longest streak of advances since January 2025.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing