The US dollar rose in early Monday trading, with the dollar index reaching its highest level since April 2025, despite Friday’s weaker-than-expected US employment report. Non-farm payrolls increased by just 29,000 in September, while unemployment edged higher to 4.2%, significantly reducing expectations of another Federal Reserve interest rate hike in October. However, markets continue to price in the likelihood of further tightening before the end of the year, while elevated Treasury yields are also providing support to the greenback. The dollar is additionally benefiting from weakness in the euro, amid growing concerns over France’s fiscal outlook and political instability, as well as safe-haven demand linked to ongoing geopolitical tensions in the Middle East and the Russia-Ukraine war. Against this backdrop, traders will turn their attention to today’s US ISM Services PMI and comments from Fed officials, while Wednesday’s FOMC minutes could provide further clues about the path of monetary policy for the remainder of the year.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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