Dollar Declines After Missed Labor Market Expectations

The US labor market missed expectations in September, adding only 29,000 jobs and pushing unemployment up to 4.2%. This led to a decline in the dollar, which had been rising due to high interest rates.

The probability of an October Fed rate hike dropped from 48% to 15%, making a pause more likely despite persistent inflation pressures.

Despite this, the dollar's resilience is notable, with DXY remaining above 101.5 and up around 1% on the week due to elevated longer-term US yields and renewed weakness in the euro.