Euro enters October amid strengthening of the American economy
The euro remains under pressure on the global foreign exchange market. At the beginning of October, the EUR/USD pair is trading in the range of 1.1321-1.1337 dollars. The dollar maintains its positions after strong U.S. macroeconomic statistics. In September, the euro lost about 2.5% against the dollar—one of the most notable monthly declines recently.
The main event of the last 24 hours was the final estimate of U.S. GDP for the second quarter of 2026. The American economy grew by 2.2% year-on-year, while the previous estimate suggested growth of only 1.5%. The revision was substantial and was primarily associated with stronger figures for consumer spending, investments, and government spending.
For the foreign exchange market, this is an important signal. A strong American economy gives the Federal Reserve more room to maintain a relatively tight monetary policy. Therefore, good GDP data support U.S. bond yields and demand for the dollar, putting pressure on EUR/USD.
Today in focus — U.S. labor market
Today, October 1, investors are awaiting weekly data on initial jobless claims. According to market consensus, about 205 thousand new claims are expected against 197 thousand a week earlier. Data on continuing claims and a number of indicators of U.S. manufacturing activity will be released simultaneously.
If the number of claims comes in significantly below forecasts, this could be an additional argument in favor of the resilience of the American labor market and support the dollar. Weaker statistics, on the contrary, may strengthen expectations of an imminent easing of Fed policy and give the euro an opportunity to recover.
It is especially important that official U.S. employment data for September are expected as early as October 2. The forecast suggests an increase in the number of jobs by about 90 thousand, with unemployment remaining at 4.1%.
What Fed representatives say
Additional volatility for EUR/USD is caused by statements from Federal Reserve officials. Minneapolis Fed President Neel Kashkari said that inflationary pressure remains too high, and revised GDP data confirm the resilience of the economy and consumer demand. He noted that further decisions will depend on incoming statistics. At the same time, the position of Fed officials does not appear entirely unambiguous.
After moderating inflation data, expectations of a rate hike in October eased somewhat. New York Fed President John Williams allowed for the possibility of postponing the next rate hike until December. This limits the potential for further dollar strengthening.
Thus, the market is currently receiving conflicting signals: strong GDP and persistent inflation argue in favor of a tighter Fed policy, while some central bank officials allow for a pause.
In the coming hours, key factors for EUR/USD will be U.S. labor market statistics, statements by Fed representatives, and the dynamics of U.S. bond yields. An additional factor remains high energy prices and the situation in the Middle East, which increase inflationary risks and simultaneously boost demand for the dollar as a safe-haven asset.
Thus, the euro starts October in a rather difficult situation: a strong American economy and high yields support the dollar, but the further movement of EUR/USD will largely depend on whether today's labor market statistics confirm the resilience of the U.S. economy.
