Dollar and G10 FX: DXY, Euro, Sterling Daily — 2026-09-05
The US Dollar Index (DXY) broke below the psychological 100.00 level as softer US labour market data and dovish Fed commentary from Christopher Waller tempered rate-hike expectations. While EUR/USD rallied to near 1.1622, Sterling’s recent gains stalled following a hot August jobs report that reignited debates on Fed policy persistence. Markets are now bracing for the ECB’s September decision and further US inflation data to determine the next directional bias for G10 majors.
Dollar and G10 FX: DXY, Euro, Sterling Daily — 2026-09-05
Top developments
DXY Slips Below 100 on Dovish Fed Signals
The US Dollar Index fell below the key 100.00 threshold, driven by a pullback in US Treasury yields and comments from Fed Governor Christopher Waller that softened immediate rate-hike bets. This shift in sentiment allowed EUR/USD to climb to approximately 1.1622, marking a significant intraday gain of 0.30% as traders reassessed the Fed's path. The move underscores the market's sensitivity to central bank rhetoric, with positioning data likely shifting toward dollar shorts in the short term.
Sterling Retreats as Hot Jobs Report Reopens Fed Debate
GBP/USD retraced earlier gains, trading near 1.3512 after the August US jobs report showed a gain of 162,000 non-farm payrolls and revised July’s figures upward. The stronger-than-expected data reaffirmed Fed Chair Warsh’s stance that the labour market remains "consistent with full employment," pushing back against expectations of imminent easing. This development highlights the persistent "higher-for-longer" risk premium embedded in the dollar, pressuring Sterling and other G10 currencies against the greenback.
Market Reaction to Labor Data: Yields Jump, Stocks Fall
The release of the August jobs report caused major stock indexes to fall while US Treasury yields spiked, reflecting renewed concerns about sticky inflation and potential Fed hikes. The data shift forced a rapid repricing of rate hike odds, which had briefly eased following Waller’s comments. For FX traders, this volatility reinforces the dollar’s safe-haven appeal during periods of macroeconomic uncertainty, even as domestic economic strength complicates the Fed’s policy outlook.
Yen Strength Adds Pressure to Dollar Pairs
A sharp rally in the Japanese Yen (JPY) contributed to the broader weakness in the US Dollar, complicating the technical picture for pairs like USD/JPY and indirectly supporting EUR/USD. The interplay between JPY strength and USD softness suggests that carry-trade unwinds or intervention fears may be influencing flows beyond simple interest rate differentials. This dynamic is critical for AUD/USD and NZD/USD, which often track risk sentiment and yen movements closely.
Local view
German Media Focus on ECB Reference Rate and US Labor Data German financial outlets such as it-boltwise.de and finanzen.at are closely monitoring the ECB reference rate, which settled at 1.1622 USD. Commentary emphasizes that the Euro's direction is now heavily dependent on upcoming US labor market reports, with the Fed's September 16 decision identified as a critical pivot point. Local analysts note that German industrial order data provided little impulse, leaving the EUR/USD pair in a tight corridor awaiting external cues.
French Coverage Highlights Sterling Volatility and Gilt Concerns French platforms like Investing.com FR report that Sterling remains volatile, balancing hawkish Fed expectations against domestic concerns over UK Gilts. Recent articles note that while the Pound strengthened against a weakening dollar earlier in the week, it faced headwinds from global yield spikes. The narrative focuses on the tension between UK fiscal stability worries and the relative strength of the US economy, keeping GBP/USD range-bound but sensitive to risk-off moves.
Context & numbers
- EUR/USD: Traded around 1.1622 on September 3rd, up ~0.30% on the day before retreating slightly on Friday due to strong US jobs data.
- GBP/USD: Hovering near 1.3512 as of September 4th, following a stall in its previous rally.
- US Jobs Report: August NFP gained 162,000, with July revised from negative to positive, significantly lifting rate-hike odds.
- DXY Level: The index broke below 100.00, a key psychological and technical support level that had held in previous sessions.
On the radar
- ECB Policy Decision: The European Central Bank’s next meeting is approaching, with markets pricing in potential rate adjustments that could decouple EUR/USD from USD trends.
- CFTC Positioning Data: The latest Commitments of Traders report (released Fridays) will reveal whether speculative net shorts in the Dollar have increased following the break below 100.
- Fed Speak: Further comments from Fed officials, particularly regarding the "full employment" narrative, will be critical in determining if the DXY can sustain levels below 100 or if a rebound occurs.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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