DXY Steadies at 101.68 as Markets Eye ISM Services, ECB Conference

The US Dollar Index sat at 101.68, down 0.09% against the prior New York close — but that is a live reading captured roughly three hours before the New York close, so the session is still open rather than settled. The reading follows Friday's US nonfarm payrolls, which added just 29,000 jobs versus around 84,000-90,000 expected, with unemployment rising to 4.2% and large downward revisions of roughly 60,000 to the prior two months. That miss cut Fed rate-hike odds and weighed on the dollar into the weekend, a one-day wobble inside a broader four-week stretch that had earlier pushed the dollar to a roughly 17-month high on a global bond-market selloff.

The Fed's target sits at 3.75-4.00% after a 25bp hike on September 16, 2026 — the first hike since 2023, passed 12-0 — with most officials projecting at least one more hike this year; the live debate is how many further hikes, not whether cuts are coming. Against that backdrop, Treasury yields ticked higher on the day: the 10-year rose 4.0bp to 5.277%, the 5-year added 5.0bp to 5.055%, the 30-year gained 2.7bp to 5.630%, and the 3-month edged up 1.1bp to 3.993%. That's a modest move, not a repricing, and it sits alongside Friday's weak payrolls report, which had cut October hike odds.

EUR/USD trades at 1.1252 (+0.08%), still inside a four-week losing streak even after Friday's payrolls-driven bounce, with euro-area September inflation accelerating to 3.8% y/y from 3.2%, the highest since September 2023, led by energy prices up 18.8%. GBP/USD is at 1.3239 (+0.34%), extending Friday's rally after the BoE held Bank Rate at 3.75% on a 6-3 vote with three dissents favouring a hike; sterling is still down roughly 2.1% on the month. USD/JPY sits at 157.84 (-0.15%) as BoJ officials signal no rush on further hikes. USD/CAD is at 1.4249 (+0.19%), with the loonie pressured by WTI crude's 1.80% slide to $91.19 after G7 governments agreed to release up to 100 million barrels of reserves; CAD is down 3.30% on the month.

USD/JPY eased 0.15% to 157.84, a small pullback rather than a reversal. Friday's session saw Tokyo's September core CPI print at 2.7% y/y, a 10-month high above the 2.4% forecast, which briefly lifted the yen — but the move faded as expectations for an October BoJ hike were pared back, with officials signalling no rush on timing. Friday's weak US payrolls report added broad dollar pressure into the weekend. Vice Finance Minister Atsushi Mimura said on September 28 that markets should take the Tokyo-Washington warning on the yen at face value, calling funding-limit concerns on yen-buying unfounded — a verbal warning only, with no confirmed MoF spending this session. Today's Japan calendar includes consumer confidence data (forecast 35.3).

Today's calendar is euro-heavy: Japan's consumer confidence lands at 16:00 (forecast 35.3 vs 35.5 prior), followed by a run of services PMIs — Spanish (18:15, forecast 57.1), Italian (18:45, forecast 54.6), French final (18:50, forecast 51.4), German final (18:55, forecast 52.9) and the eurozone final reading (19:00, forecast 53.0). German Buba President Nagel speaks at 18:45, and the ECB's Frankfurt monetary-policy conference runs today and tomorrow, with Chief Economist Philip Lane due to give a keynote. Sentix investor confidence (19:30, forecast 4.5 vs 5.1) and UK final services PMI (19:30, forecast 51.7) follow, then eurozone PPI m/m at 20:00 (forecast 1.9% vs 1.6%). Early tomorrow, Sydney time, US ISM Services PMI (01:00, forecast 55.1 vs 55.4) is next up for the dollar.