Dollar Wavers, Oil Drops as Traders Eye US Payrolls

It's US employment data day as traders head into the North American session. The dollar is mixed, Treasury yields are slightly lower, and US stock futures are higher. Canada's jobs data comes next week, so attention is on the US labor market today.

Economists forecast the September payrolls report to add 90,000 jobs, compared with 162,000 in August. The unemployment rate is seen staying at 4.1%, and average hourly earnings are expected to climb 0.3% on the month.

Markets see about a 21% probability of a Federal Reserve rate increase in October. A robust jobs report, especially with stronger wage growth, might lift those odds. A weaker report could lessen the pressure for further tightening.

For market participants, the headline payroll figure is just one piece. Revisions to prior months, the jobless rate, and wages will help decide if the early market move holds.

The dollar shows a mixed performance before the jobs report.

The greenback is down versus the yen, sterling, franc, Australian and New Zealand dollars. It is up against the Canadian dollar and slightly up against the euro, though the euro's move rounds to flat in the given data.

The Swiss franc posts the biggest gain versus the dollar, extending its correction and breaking under its 200-hour moving average and upward-sloping trendline. The key question is whether USD/CHF can remain below the 200-hour MA at 0.8291. If it does, a move to 0.82167 is the target, which is the 38.2% retracement of the rise from the Aug. 20 low.

The Canadian dollar is the weakest, staying above its 100-hour moving average.

A recap of today's moves:

• EUR/USD at 1.1241, virtually flat at the given precision.
• USD/JPY at 157.77, down 0.19%.
• GBP/USD at 1.3209, up 0.08%.
• USD/CHF at 0.8282, down 0.30%.
• USD/CAD at 1.4240, up 0.15%.
• AUD/USD at 0.6937, up 0.12%.
• NZD/USD at 0.5609, up 0.11%.

The mixed dollar action follows the dollar index briefly hitting its highest since May 2025, around 102, per MUFG's analysis. The upcoming jobs report will be the next challenge for the greenback's strength.

US equity futures are headed higher.

As of 7:40 AM ET, futures indicated gains for the main indexes:

• Dow Jones Industrial Average up 208 points.
• S&P 500 up 36 points.
• Nasdaq 100 up 170 points.

Falling oil and the ongoing decline in Treasury yields create a more favorable environment before the jobs data. But the 8:30 AM ET release could rapidly alter that picture.

Treasury yields are slightly down following the sharp drop yesterday.

• Two-year at 4.7809%, off 0.61 basis points.
• Five-year at 4.9926%, down 1.24 bps.
• 10-year at 5.2242%, lower by 0.98 bps.
• 30-year at 5.5989%, off 0.41 bps.

The day's changes are modest versus the steep drop from Thursday. The key is whether the jobs report reinforces that decline or triggers a rebound.

Crude oil drops as Europe talks about releasing strategic reserves.

Oil is deeply in the red, with WTI futures quoted at $89.32, a drop of $3.55, or 3.82%.

According to Reuters, France has floated a plan to release 50 million barrels of diesel from European stockpiles, along with 50 million barrels of crude from IEA member countries. The talks come after the US pushed Europe to tap fuel inventories and threatened to ban diesel exports. So far, these are only proposals, not a finalized release.

The prospect of extra supply provides some comfort for energy markets. For the wider economy, persistently lower fuel costs could ease inflation, though emergency releases don't address the root supply problems.

Other markets in the provided data:

• Spot gold at $4,183.11, up $5.73, or 0.14%.
• Silver at $61.02, up 0.13%.
• Copper at $6.5685, up 0.47%.
• Bitcoin at $86,425, up $1,572, or 1.85%.

Eurozone inflation climbs to 3.8%.

Eurozone preliminary September inflation exceeded forecasts:

• Headline CPI at 3.8% year-over-year, compared with a 3.6% forecast and 3.2% prior.
• Core CPI at 2.5% year-over-year, matching expectations and up from 2.4%.

Energy is still the main factor, with prices surging 18.8% from a year ago. But services inflation also rose to 3.2% from 3.0%.

For the European Central Bank, the worry is whether the energy shock seeps into broader inflation. With headline inflation near 4%, pressure stays on officials, even though higher bond yields are tightening financial conditions.

European stocks are nonetheless rising:

• DAX at 25,223.84, up 1.14%.
• CAC 40 at 7,888.32, up 0.68%.
• FTSE 100 at 10,454.89, up 0.26%.
• IBEX 35 at 19,052.79, up 0.25%.
• FTSE MIB at 50,313.08, up 0.15%.

North American events today:

At 8:30 AM ET, the September US jobs data is published:

• Nonfarm payrolls seen at 89,000, down from 162,000.
• Unemployment rate forecast at 4.1%, unchanged from prior.
• Average hourly earnings month-over-month expected at 0.3%, same as before.

At 10:00 AM ET:

• Factory orders seen at 0.1%, versus 0.9% prior.
• Dallas Fed President Lorie Logan is set to speak.

Canada's employment data arrives next week.

Price action should confirm the narrative.

Jobs data often triggers a sharp initial move that then reverses as traders assess wages, unemployment, and revisions. This makes technical levels important. A breakout is only the beginning. Holding beyond a level gives either bulls or bears greater control.