Dollar's three-week run pushes the EUR/USD fixing down to 1.1225

The US dollar ended the week as the strongest of the major currencies. The European Central Bank's EUR/USD reference rate fell to 1.1225 on Friday, October 2, down 0.65% from Thursday and 1.56% below the fixing of September 25. On Friday, Investing.com reported that the dollar was on course for its first three-week winning streak since January.

The move came despite a soft US jobs report. According to investingLive, non-farm payrolls rose by just 29,000 in September, well below expectations, and 10-year Treasury yields initially fell on the release, to a low of 5.16%. The dollar has held its gains since: early on Monday, Investing.com reported that the euro hit a 17-month low as the dollar surged against Asian currencies.

The majors at Friday's fixing

ECB reference rates are one official snapshot per business day, not live quotes. They still show the direction of the week clearly. The euro, the Australian dollar and the New Zealand dollar all lost more than 1% against the dollar over five fixings, and USD/MXN rose 3.59%. The Swiss franc was the exception on Friday: USD/CHF fell 1.03% from Thursday's fixing.

Why a weak jobs report did not sink the dollar

A payrolls miss can weaken a currency because it can lower expectations for interest rates. This time, the bond market kept the pressure on. investingLive argues that yields remain the main pressure point for markets this week, even after the jobs data.

In its Asia-Pacific wrap, investingLive previews the Fed minutes: guidance for one more hike now meets softer data, and the odds of an October move are fading. FXStreet sees the same tension in gold, which held below $4,150 on Monday as a rallying dollar offset receding bets on a Fed hike.

The euro's own problem: French debt

The euro is not weak only because the dollar is strong. FXStreet reports that the euro softened against the pound to around 0.8475 on Monday, as fiscal concerns in France after a steep bond-market rout stirred fears of contagion across the eurozone.

The banks disagree on what comes next. Citi sees downside risk for the euro to 1.0850 if peripheral bond spreads widen, according to Investing.com. Bank of America sees EUR/USD at 1.15 by year-end, also per Investing.com.

What to watch next

• Bond yields. investingLive calls them the market's pressure point for the week.
• The Fed minutes. investingLive says one-more-hike guidance now meets softer data.
• French debt. FXStreet ties Monday's euro weakness to the French fiscal story.
• Oil. Brent slipped toward $102 a barrel in Asian trade on Monday, says investingLive.

Follow the EUR/USD chart on TradingView for the live price between fixings.