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Softer US jobs data trims odds of an October Fed hike

UOB said weaker September Payrolls and wage growth have shifted market focus toward the September CPI, even as elevated US bond yields keep the dollar supported.

Reported · Written up by our desk · Major Pairs

FXStreet, citing commentary from UOB’s Alvin Liew, said weaker US September Payrolls and softer wage growth have reduced expectations for an October Federal Reserve rate hike. The outlook has moved markets toward watching September CPI for further guidance on the Fed path.

The note also said the labor market lost momentum, while UOB still expects further tightening into December 2026 and 1Q 2027, followed by a prolonged hold through 2027.

FXStreet added that AUD/USD held above 0.6950 but edged lower during the Asian session, as caps on USD gains appeared to limit the dollar’s upside despite the shift away from October hike odds.

The commentary pointed to elevated US bond yields near multi-year highs and geopolitical uncertainties as reasons the US dollar has retained a bullish tone despite receding October Fed hike bets.

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