Strong Dollar Continues to Weigh on Markets (10.02.2026)

A stronger dollar and elevated Treasury yields kept pressure on major currencies and precious metals as markets awaited the latest US employment data. 

The euro fell below 1.13 to its weakest level since May 2025, while sterling remained near three-month lows around 1.32. Gold slipped toward $4,190 and silver traded near $61.40 as rising oil prices renewed inflation concerns and both metals headed for weekly losses. Meanwhile, the yen firmed slightly below 158 after stronger Tokyo inflation data, although the widening US-Japan policy gap continued to limit its recovery.

Euro Drops Below $1.13

The euro fell below $1.13 to hit its lowest level since May 2025, following a September slide of over 2%, its sharpest monthly drop in 14 months. Broad dollar strength and expectations that the European Central Bank will lag the Federal Reserve's tightening pace weighed heavily. Meanwhile, ECB Executive Board member Isabel Schnabel signaled caution regarding energy shocks, while a subdued economic growth outlook continues to restrain aggressive rate increases.

The first resistance is positioned at 1.1270 while the support starts from 1.1220.

Gold Slips Toward $4,190

Gold slipped to around $4,190 an ounce on Friday, heading for a second consecutive weekly loss as rising crude oil prices driven by US-Iran geopolitical tension heightened inflation fears. A firmer US dollar and elevated Treasury yields added further pressure ahead of the upcoming September non-farm payrolls release, while Minneapolis Fed President Neel Kashkari noted uncertainty over how high interest rates must go.

First resistance is seen at $4230, with initial support near $4140.

Yen Firms Slightly After Tokyo Inflation Data

The yen firmed slightly below 158 per dollar on Friday as Tokyo’s core inflation rate accelerated to 2.7% in September, surpassing the Bank of Japan’s 2% target for the first time in nine months. However, gains remained limited after a less hawkish summary from the BOJ's September meeting offered little clarity on future rate hikes. With Federal Reserve tightening continuing to outpace BOJ policy normalization, the yen stayed on track for its third consecutive weekly loss.

First resistance is seen at 159.50, with initial support near 155.00.

Sterling Drops Near $1.32 to Start October

Sterling weakened to around $1.32 near three-month lows at the start of October, following a 2% September drop as elevated oil prices heightened inflation concerns, raised bond yields, and dampened economic growth prospects. Markets now price in four Bank of England rate hikes by July 2027, beginning in November, supported by Governor Andrew Bailey's signals of openness to further monetary tightening.

From a technical view, resistance stands near 1.3340, with support around 1.3140.

Silver Trades Near $61.4

Silver hovered around $61.4 per ounce on Friday, bound for another weekly decline as rising crude oil prices sparked US-Iran escalation fears and renewed inflation worries. A firmer dollar and elevated Treasury yields further pressured the metal ahead of the upcoming US non-farm payrolls data.

From a technical view, resistance stands near $62.00, while support is located around $60.00.