Forex Today: US NFP takes centre stage

The US dollar extended its advance on Thursday, October 1, reaching levels last seen in early April 2025, as currency markets braced for the week's closing round of major data releases. According to FXStreet's daily Forex Today wrap, the greenback's gains were attributed to a marked improvement in sentiment surrounding the US dollar, alongside geopolitical uncertainty and renewed concerns over the French economy.

The US Dollar Index, which measures the greenback against a basket of peers, cleared what FXStreet described as the key 102.00 hurdle and pushed on to 18-month tops. The move came as investors continued to gear up for critical data at the end of the week, with the US employment report the central focus heading into Friday, October 2.

The euro bore the brunt of the dollar's strength. EUR/USD added to its ongoing weakness, selling off into the low 1.1200s and reaching fresh 17-month troughs. The pair's slide follows a break below the 1.13 handle noted in market commentary this week, and comes against a backdrop of renewed questions about France's fiscal and economic position. On the euro area calendar, the flash estimate of euro zone inflation was set to wrap up the region's data schedule, giving traders a final domestic input before the US jobs numbers.

The Japanese yen told a different story. FXStreet reported that the yen recovered as intervention risk offset US dollar strength, a reference to the long-standing sensitivity of USD/JPY to the possibility of official action by Japanese authorities when the currency weakens quickly. That dynamic has repeatedly tempered yen declines even in periods when the dollar is broadly bid elsewhere.

The approach of the US non-farm payrolls release is the near-term focal point for both currencies and precious metals. Labour market data feed directly into expectations for Federal Reserve policy, which in turn drives the dollar and short-dated Treasury yields. Markets have spent recent sessions repricing those expectations in both directions: softer-than-expected inflation data and weekly jobless claims had earlier tempered some of the hawkish repricing, while stronger private-sector hiring figures pushed in the opposite direction.

Gold has been caught in the crossfire of that repricing and of the firmer dollar. CNBC reported gold's spot price at $4,180.59 per ounce as of 9:00 a.m. ET on Thursday, slightly below the $4,207.81 recorded at the same time on Wednesday. Separately, Kitco noted bullion trading around $4,158 per ounce following the release of the ISM Manufacturing PMI, which dipped to 54.5. A stronger dollar typically raises the cost of dollar-denominated bullion for holders of other currencies, while higher bond yields increase the opportunity cost of holding a non-yielding asset — two headwinds that have been in play this week.

For market participants, the combination of an 18-month high in the dollar index, multi-month lows in EUR/USD, an intervention-sensitive yen and a gold market consolidating below recent peaks makes the payrolls print an unusually broad event risk. The data will be read for signals on hiring momentum, wage growth and the unemployment rate, each of which shapes the Fed's assessment of how restrictive policy needs to remain.

As always, the direction of travel after the release will depend on how the figures compare with consensus forecasts, and on how bond yields respond. Market expectations can shift quickly, and past moves are not a reliable guide to what follows.

Follow EUR/USD, GBP/USD, USD/JPY and XAU/USD on Puqet: WOZILA, our forex & gold signal service, publishes trade ideas with a stated entry, stop-loss and take-profit, and explains how each one is tracked.

This is a news summary for general information only — not financial advice, and nothing here is a recommendation to buy or sell any currency or metal. Exchange rates and gold prices can move sharply around data releases and central-bank decisions, and trading them carries a real risk of loss, which leverage magnifies. Always verify against the original source and do your own research before making a financial decision.