The US dollar is set to close Friday with a fourth consecutive winning week versus the euro — its longest such run since mid-May 2025. The euro edged up 0.13 percent on the day to $1.1258, but that small bounce could not undo a week in which the greenback's rate advantage and Europe's bond-market strain kept sellers in control.

The tone was set by government bonds on both sides of the Atlantic. A selloff in European sovereign debt, led by France, kept US Treasuries looking relatively attractive, while expectations that the Federal Reserve will stay hawkish underpinned the dollar through Friday's session.

Why it matters

A fourth weekly win is not just scoreboard trivia — it reflects a rate gap that keeps widening. France's 10-year yield hit its highest level since 2002 on Thursday, with the gap to German bunds stretching past the 150-basis-point mark, its widest since late 2011, as markets priced in fiscal and political risk ahead of the 2027 elections. Money flowing out of French and Italian debt has nowhere cheap to go in Europe, which keeps the euro heavy.

The dollar's bid survived what could have been a soft spot: US September jobs data came in below expectations and the unemployment rate ticked up to 4.2 percent. Yet the 10-year Treasury yield, after an initial dip, climbed 5.14 basis points to 5.285 percent by the end of the day. The market is reading the report as Goldilocks — activity resilient enough to justify tight policy, but not so hot that it forces more inflation fear. That framing matches our earlier read on the US dollar uptrend into the jobs data, and it extends the pressure on European currencies we flagged when the pound slid to three-month lows on the same bond-rout story.

What to watch

  • The October FOMC meeting: CME FedWatch shows traders now price an 86 percent chance the Fed holds rates steady, up from 36 percent a week ago — a sharp swing that the jobs data helped cement.
  • French politics and the 10-year OAT spread over bunds: any narrowing below 150 basis points would signal the euro squeeze is easing.
  • Oil and the euro-yen cross: higher crude has been pushing investors away from major energy importers' currencies; European governments agreed on Friday to release diesel stocks under pressure from President Trump, in a move aimed at cooling fuel costs tied to the Iran conflict.
  • Euro zone inflation prints: accelerating price pressure would keep the ECB on a tightening path — the one real counterweight to euro weakness.

MarketRadar take

The euro's problem is no longer just the Fed — it is France. With Nomura's Dominic Bunning calling the jobs data Goldilocks and removing tail risk of an October hike, the dollar does not need more good news; it just needs Europe's bond market to stay under pressure. Bank of America's note that EUR/CHF risk-reversal skew has hit historical extremes tells you positioning is getting crowded on the euro-bearish side, which is worth respecting — but until French spreads stabilize, the path of least resistance for EUR/USD stays lower. No position here is risk-free, and this is not advice — just the tape.