US Dollar Surges in Global Markets Amid French Unrest and US Jobs Data
The US dollar surged in global markets against the euro amid political turmoil in France and weaker-than-expected US employment data, pushing local exchange rates.
The US dollar opened the foreign exchange trading week with strong gains in global markets, rising primarily against the euro amid severe unrest in France and a weak US jobs report.
Global Market Movements and Currency Pressures
Concerns over political paralysis in France threaten the government's ability to implement a 54 billion euro budget cut package for 2027, leaving the local debt crisis unresolved. In global markets, the US Dollar Index rose 0.5% to 102.5 points, while the euro dropped 0.7% to trade below 1.12 dollars. The British pound fell 0.3% to around 1.32 dollars, and in Japan, the dollar edged up 0.2% to 158.1 yen.
In the local Israeli market, the euro experienced a sharp drop alongside mild movement in the American currency. The dollar traded slightly above 3.04 shekels, while the euro lost 1% against the shekel, following a similar drop on Friday, to trade around 3.40 shekels.
US Employment Data and Federal Reserve Expectations
Background trading was also influenced by a weak US employment report released on Friday. Data showed an addition of just 29,000 jobs in September and an increase in the unemployment rate to 4.2%. Market consensus had anticipated 84,000 new jobs and an unemployment rate of 4.2%, unchanged from August. This followed a downward revision of August data to 133,000 added jobs from the originally reported 162,000.
"The US dollar is the primary beneficiary in the current environment: the rise in US bond yields increases the attractiveness of American assets, while widespread global bond selling channels funds into the dollar as a safe haven," said Matthew Ryan, head of market strategy at Ebury.
Following the jobs report and additional macroeconomic data, investors are currently pricing in a 78% probability that the Federal Reserve will leave interest rates unchanged at its upcoming meeting on October 28, compared to 36% a week ago, according to the CME FedWatch tool.
