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Bank of Japan

Dollar Set for First Three-Week Winning Streak Since January as Euro and Yen Move

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On Friday, October 2, 2026, the dollar index slipped on the day but remained about 1% higher for the week, putting it on course for a three-week winning streak, according to Reuters reporting republished by Investing.com. The euro managed a small daily rebound while remaining down for the week; the yen strengthened against the dollar. Those moves describe different currencies and time frames, not a single market-wide direction.

What the dollar’s three-week streak means

The U.S. dollar index tracks the dollar against a basket of major currencies. Reuters’ matching report, published through Investing.com, put it at 101.93 at 15:36 ET (19:36 GMT) on October 2: down 0.2% that day but up about 1% for the week. The report said the index was set for its first three-week run of weekly gains since mid-January. Read the Reuters report republished by Investing.com.

A separate Reuters account reported an index level of 102.08, also a roughly 1% weekly gain, and described a 17-month high earlier in its reporting window. It characterized the run as the third consecutive weekly gain, with the previous such streak in May 2025. The two reports differ in their historical framing and market snapshot; the “since January” comparison belongs to the report linked above, rather than being interchangeable with the other account’s comparison. See the separate Reuters report republished by Investing.com.

Why the dollar rose despite a weaker U.S. jobs report

Reuters reporting cited renewed selling in the U.S. bond market and elevated Treasury yields as supports for the dollar. Expectations of a hawkish Federal Reserve stance were another reported support. The euro’s sharp decline also helped the dollar index, since the index measures the U.S. currency against a basket that includes the euro.

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The picture was not uniformly favorable to the dollar. Reuters said the September U.S. jobs report was weaker than expected, tempering expectations for imminent Federal Reserve rate hikes. The dollar trimmed some gains after the report. These are reported market interpretations, not confirmation of what the Fed will do next.

Why the euro rebounded but still lost ground for the week

The euro rose 0.1% to $1.1258 on Friday after its steepest intraday decline since June 17, Reuters reported. That daily bounce did not erase the week’s losses: the euro was down 1.2% for the week and heading for a fourth consecutive weekly decline against the dollar. A daily move and a weekly return cover different periods, so they can point in opposite directions without contradicting each other.

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French fiscal concerns weighed on the currency

Reuters linked pressure on the euro to concerns over France’s budget and public finances, alongside rising French borrowing costs. The report said France’s proposed 2027 budget aimed for a deficit of 5% of GDP through proposed spending cuts of 54 billion euros. It also reported a projected deficit of 5.4% of GDP for the year and public debt approaching 120% of GDP. These are figures reported in the October 2 Reuters account, not independently verified fiscal data. Read Reuters reporting republished by MarketScreener.

Inflation added to the policy uncertainty

The same Reuters report said euro-area headline inflation rose to 3.8% in September from 3.2% in August, above its cited 3.6% expectation. Core inflation edged up to 2.5% from 2.4%. These are Reuters-reported figures, not independently checked here against the underlying statistical release.

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Thierry Wizman, global FX and rates strategist at Macquarie, argued that the rise in France’s sovereign risk premium likely removed the possibility of an October 29 European Central Bank rate hike. That was a strategist’s view, not an ECB decision or certainty. In the same report, Wizman said the dollar’s prior sharp rise against major currencies was driven mainly by the euro’s plunge.

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Why the yen strengthened

The yen strengthened to 157.82 per dollar, Reuters reported. The account linked the move to Tokyo inflation data: both headline and core inflation were described as reaching their highest levels since November 2025 and remaining above the Bank of Japan’s 2% target. This supported market expectations of further BOJ tightening after a quarter-point rate increase in September.

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Japanese government bond yields reportedly fell after touching 30-year highs earlier in the week. The reported inflation and bond-market moves help explain the yen’s Friday gain, but they do not establish a guaranteed path for BOJ policy or the exchange rate.

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How to read this market update

  • Keep the time frame attached: the dollar index’s weekly gain coexisted with a small Friday decline, while the euro’s Friday rise coexisted with a weekly loss.
  • Distinguish the measures: the dollar index is a basket measure; the euro and yen figures describe bilateral exchange rates against the dollar.
  • Treat catalysts as explanations, not forecasts: bond yields, inflation, fiscal concerns and rate expectations were cited by Reuters as market drivers, but the reports do not establish a dependable forecast or a preferred currency trade.

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