US inflation expectations held steady at 3.9% in October, but rising job-loss fears and concerns over unemployment reaching 2020 levels weighed on the US Dollar against major peers like the Euro.
The NY Fed's October survey shows one-year inflation expectations unchanged at 3.9% while consumers see unemployment rising to its highest level since 2020. Rising job fears with steady inflation tilt the policy outlook toward easier Fed policy, mildly weighing on the dollar. The same-day heat map shows the dollar mixed (up vs CHF/JPY, down vs EUR/NZD), capping conviction.
With US inflation expectations stuck at 3.9% but unemployment expectations at their highest since 2020, markets may lean toward Fed rate cuts, supporting the euro against the dollar. The survey data itself is soft news, and EUR/USD was up only about 0.54% on the day, so the effect is modest.
The New York Fed's October Survey of Consumer Expectations revealed that one-year inflation outlooks remained steady at 3.9%. While inflation expectations for three and five years held at 3.3% and 3% respectively, consumers expressed growing anxiety regarding the labor market, projecting unemployment to reach its highest level since 2020.
The survey shows 1-year inflation expectations unchanged at 3.9% but rising expectations for unemployment, and rising job fears combined with steady inflation argue for an easier Fed policy stance, which tends to weaken the dollar.
The picture was mixed: the dollar gained against the Japanese Yen and Swiss Franc but lost ground against the Euro, Pound and New Zealand Dollar on the day.
It is a secondary data release. The key takeaway was steady inflation at 3.9% alongside rising job-loss fears, which only mildly favors a weaker dollar and therefore a higher EUR/USD.