U.S. job growth slowed in September, and the dollar dipped after the report. Yet it stayed firm against the euro. High U.S. borrowing costs, oil prices, and European debt worries explain why.
Key Takeaways
- The U.S. added 29,000 jobs in September. The unemployment rate was 4.2%.
- U.S. inflation was 3.4% in August. A first estimate put euro-area inflation at 3.8% in September, with energy prices a major driver.
- U.S. services data, Philippine inflation, Federal Reserve meeting minutes, and Canadian jobs are on this week’s calendar.
What did the U.S. jobs report show?
The U.S. added 29,000 jobs in September, according to the October 2 report. This measure is often called nonfarm payrolls, or NFP. It counts jobs outside farming and a few other groups. The unemployment rate was 4.2%, compared with 4.1% in August.
Earlier job counts for July and August were cut by a combined 60,000. Hourly pay rose 0.1% in September.
The dollar eased after the report. Slower hiring can reduce pressure on the Federal Reserve, or Fed, to raise rates. But one report does not settle the debate.
Why did the dollar remain firm against the euro?
U.S. government bond yields remained high. A bond yield is the return from holding a bond. Higher U.S. yields can make dollar assets more attractive.
European debt worries and costly oil also weighed on the euro. By Friday, the dollar was on track for another weekly gain against it, despite easing after NFP. EUR/USD shows the euro’s value in dollars.
What did inflation and oil add to the picture?
The U.S. PCE price index, a measure of prices paid by consumers that the Fed watches closely, rose 3.4% from a year earlier in August. It rose 0.3% from July. The report came out on September 30.
In Europe, a first estimate showed annual inflation at 3.8% in September, up from 3.2% in August. Energy led the rise. Inflation can keep central banks focused on rates, while costly fuel can hurt oil importers.
On October 4, OPEC+, a group of oil-producing countries, kept its November output targets steady. Export disruptions tied to the Iran war continued. New oil news could move inflation expectations and currencies.
What did Australia’s central bank do?
On September 29, Australia’s central bank raised its main rate by 0.25 percentage point to 4.60%. It said inflation was still too high. Rate differences matter for AUD/USD, the Australian dollar’s value in U.S. dollars.
What forex events are scheduled for October 5–11?
| Date | Event | Why forex traders may watch |
|---|---|---|
| October 5 | U.S. services PMI, a survey of activity at service businesses | It may change views on U.S. growth and the dollar. |
| October 6 | Philippine September inflation | It may affect expectations for Philippine interest rates and USD/PHP. |
| October 7 | Fed minutes, the written record of its September rate meeting | Traders may look for clues about how officials weighed inflation against slower hiring. |
| October 9 | Canadian September jobs report | It may move the Canadian dollar and USD/CAD. |
These results were not available when this article was prepared on October 5.
Quick Questions
Does weak NFP always weaken the U.S. dollar?
No. Rates, other data, and news from abroad also affect the dollar.
Why does oil matter for forex?
Oil can raise costs and inflation for importing countries, changing expectations for rates and currencies.
Which currency pairs are in focus this week?
EUR/USD may react to U.S. rate expectations. USD/PHP may respond to Philippine inflation; USD/CAD may react to Canadian jobs. These are not price forecasts.
Conclusion
Weak U.S. jobs did not tell the whole forex story. The dollar eased after the report but remained firm against the euro amid high yields, oil, and European debt worries. This week’s data may change rate expectations again.
Disclaimer: This article is for information and education only. It is not financial advice. Forex trading carries risk. Do your own research or speak with a qualified professional before making a trading decision.
