US Dollar Today, October 31, 2026: DXY 101.3 Off 0.8% on Week as Fed Bets Slide

The dollar is closing October near the bottom of its recent range. The ICE U.S. Dollar Index finished Friday near 101.3, down about 0.4% on the day and roughly 0.8% on the week, back within sight of the three-month lows set in late October. Cash markets reopen Monday, but the positioning that will greet them is already set: speculative dollar longs have been trimmed for a third consecutive week, and the index has spent three weeks orbiting 101.

The employment report did the damage. October payrolls rose 125,000 against a 140,000 consensus and average hourly earnings cooled to 3.5% year over year, pulling implied December Fed hike odds from about 78% to roughly 68%. It was a front-end move: two-year yields led the decline to 3.64%, the ten-year slipped three basis points to about 3.54%, and the curve steepened modestly off its most inverted level of the month — the combination that pressures the dollar against funding currencies first.

Crosses reflected the same shift. The yen firmed as the rate differential narrowed and Bank of Japan December hike odds rose, keeping USD/JPY near the 154 area, while the euro drew support from a European Central Bank whose December meeting remains a live debate between a hawkish hold and a hike. Thursday's hot September PCE print at 3.1% had pushed the index to its best level of the week; Friday's reversal unwound most of it inside a session. This is repricing within a range, not a trend break.

The calendar decides whether 101.3 breaks lower. ISM services on Wednesday, November 4 is the marquee print — a prices-paid reading above 58 would rebuild the hike premium and put 102 back in play, while a soft reading opens the 100 level that would signal markets have stopped believing in a December hike at all. Five FOMC speakers through Friday and Treasury's quarterly refunding fill out the week. Until one of those edges breaks, the 100-103 range stands.