Dollar Set for Fourth Consecutive Weekly Rise Over Euro Amid Yield Surge
The greenback is on track for a fourth straight weekly gain against the euro, buoyed by high U.S. Treasury yields and a sell-off in European bonds.
The U.S. dollar is poised to record a fourth consecutive weekly increase versus the euro, driven by strong Treasury yields and a broader sell-off in European sovereign debt. September job figures showed weaker-than-expected growth and a slight uptick in the unemployment rate to 4.2%, which trimmed some of the dollar’s recent gains but left it underpinned by yields hovering near historic highs. Rising crude oil prices have further reduced demand for currencies of large energy-importing economies, notably the euro and the yen.
The euro’s slide represents its longest run of weekly declines since mid-May 2025, with the pair trading around $1.1285. Analysts, including Nomura’s Dominic Bunning, view the mixed jobs data as a “Goldilocks” scenario that eases inflation concerns while keeping risk assets resilient. Meanwhile, Fed expectations have shifted, with market participants now pricing an 86% chance the Federal Reserve will hold rates steady later this month, up from 36% a week earlier.
Why it matters
The dollar’s strength influences global trade, borrowing costs and the value of everyday currencies for consumers worldwide.
How this story developed
- Sep 17 Fed’s Unanimous Rate Hike Signals Hawkish Shift, Sparking Market Unease
- Sep 20 The Fed implemented a modest rate increase and a hawkish tone from the new chair.
- Sep 30 The Federal Reserve’s inspector general concluded that no federal crimes were committed in the costly headquarters renovation, though the board was faulted for management lapses.
- Oct 1 The Inspector General’s report was released, stating there is no basis for criminal prosecution.
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