he U.S. dollar is mostly higher to start the fourth quarter, with elevated Treasury yields continuing to support the greenback despite yesterday’s softer U.S. PCE inflation report.InvestingLive’s Justin Low reports that the dollar has reached its highest level in more than three months, with the dollar index extending toward 102. The U.S. 10-year yield reached around 5.34% overnight before retreating to around 5.28% in the updated morning snapshot. Meanwhile, EURUSD has slipped below 1.1300.For traders, the message is that softer inflation has not been enough to produce a sustained retreat in longer-term borrowing costs. Yields are easing this morning, but they remain elevated. U.S. stock futures are pointing to a higher opening as traders await jobless claims and the ISM manufacturing report.The dollar is mostly higherIn the early-morning currency snapshot, the dollar was higher against five of the seven major currencies. The yen was the weakest against the greenback, while the Swiss franc and Australian dollar were unchanged:EURUSD: 1.1289; USD higher by 0.34%.USDJPY: 158.07; USD higher by 0.43%.GBPUSD: 1.3219; USD higher by 0.35%.USDCHF: 0.8357; unchanged.USDCAD: 1.4247; USD higher by 0.13%.AUDUSD: 0.6943; unchanged.NZDUSD: 0.5609; USD higher by 0.39%.USDCHF reaches its highest level since May 2025Although USDCHF was unchanged in the early snapshot, its broader advance has taken the pair to its highest level since May 2025. Low Swiss inflation and a steady Swiss National Bank policy stance have helped support that move, against a backdrop of higher U.S. interest rates.The pair reached 0.8382 today before correcting lower. That brought the price closer to the next upside target at 0.8400. The nice round number also marks the 50% midpoint of the decline from the January 2025 high, making it an important technical hurdle.Despite the pullback, the price remains above its 100-hour moving average at 0.8326. That level defines the near-term risk for buyers.Stay above is more bullish and keeps another push toward 0.8382, followed by 0.8400, in play. Move below, and sellers would gain more control over the correction.For beginner traders, a pullback from a high does not automatically reverse the trend. The question is whether the price holds above the technical levels supporting that trend. The 100-hour moving average gives buyers a level to lean against with risk defined and limited.U.S. stock futures point to a higher openingAt 8:00 a.m. ET, U.S. stock futures implied opening gains:Dow industrial average: up 136 points.S&P 500: up 33 points.Nasdaq: up 189 points.Treasury yields retreat from overnight highsTreasury yields are lower across the four benchmark maturities after the 10 year extended to a new cycle high of 5.33% earlier today2-year: 4.8579%, down 2.91 basis points.5-year: 5.0644%, down 2.46 basis points.10-year: 5.2766%, down 1.64 basis points.30-year: 5.6263%, down 1.27 basis points.The retreat offers some relief from the overnight bond selling, although borrowing costs remain elevated.That distinction matters. Expectations for the next Fed decision have a more direct influence on shorter maturities. Longer-term yields also reflect expectations for growth, inflation and the compensation investors demand for holding longer-dated debt.Higher market yields can also do some tightening for the Fed by increasing financing costs for households and businesses.Neel, Minneapolis Fed president: Resilience keeps inflation in focusNeel said the economy continues to surprise him with its resilience and that the Fed will do what is needed to return inflation to target.He described consumer spending as strong and the labor market as broadly healthy, while acknowledging pressure in housing and related industries. He also said he does not know how high rates will need to go to bring inflation down.My takeaway is that one softer inflation report does not settle the policy debate. The Fed still has to weigh improving inflation readings against resilient demand and the risk that price pressures persist.Oil rises as Iran headlines remain a riskCrude oil was trading at $92.18, up $1.76, in the early-morning snapshot.Headlines citing Time Magazine report that President Trump described an increase in bombing Iran after the midterm elections as “possible.” The wording matters: it leaves escalation on the table without confirming a decision or timetable.Trump also said the U.S. would soon replenish its Strategic Petroleum Reserve (we've heard that before), referring to oil coming from Venezuela. The headline did not provide a purchase schedule or volume and if soon means in a few years, he may be right..For markets, renewed escalation would threaten energy supplies and could complicate the inflation outlook. Oil is moving higher this morning alongside those headlines.Other markets in the early snapshot:Gold: $4,175.46, up $14.54, or 0.35%.Silver: $60.8699, up $0.4409, or 0.73%.Copper: $6.5620, down $0.0595, or 0.90%.Bitcoin: $83,889, up $326, or 0.39%.Gold and silver are higher despite the firmer dollar, underscoring that currency moves are only one influence on precious metals.Overnight data: European manufacturing expands; Japan’s growth slowsEuropean manufacturing readings were generally better than expected:Eurozone final manufacturing PMI: 52.9 versus 52.7 expected.Germany: 53.9 versus 53.8 expected.France: 50.6 versus 50.3 expected.Italy: 50.4 versus 50.1 expected.Spain: 51.0 versus 50.2 expected.UK final manufacturing PMI: 51.9 versus 52.0 expected.Readings above 50 indicate expansion. The improved eurozone figures have nevertheless not prevented EURUSD from moving lower this morning.Japan’s September manufacturing PMI slipped to 54.1 from 54.9, a six-month low. That signals slower expansion, with new-order growth moderating while employment and export demand remained strong. Firms continued to report component shortages and elevated energy, transport and currency-related costs.Swiss inflation matched expectations:Headline CPI: 0.0% month-on-month versus 0.0% expected; prior +0.4%.Headline CPI: 1.0% year-on-year versus 1.0% expected; prior 0.8%.Core CPI: 0.5% year-on-year; prior 0.4%.Inflation has edged higher, but the low core reading helps explain why the SNB can maintain a steady policy stance.Swiss retail sales rose 3.2% year-on-year, above the 2.1% forecast, while manufacturing PMI fell to 55.3, below the 56.3 forecast.North American calendar: Claims and manufacturing in focusChallenger job cuts fell 19.9% year-on-year, compared with a 38.5% decline previously. Announced cuts remain below year-earlier levels, although the decline has narrowed.The main releases ahead, with times in ET:8:30 a.m. — Initial jobless claims: 201,000 expected; 197,000 prior.8:30 a.m. — Continuing claims: 1.730 million expected; 1.719 million prior.9:45 a.m. — Final S&P Global manufacturing PMI.10:00 a.m. — ISM manufacturing PMI: 54.8 expected; 54.6 prior.10:00 a.m. — ISM prices paid: 72.9 expected; 71.1 prior.10:00 a.m. — Construction spending: unchanged expected; down 0.5% prior.The ISM report deserves attention beyond its headline. New orders provide a view of demand, employment adds context ahead of Friday’s jobs report, and prices paid will help traders assess whether manufacturing cost pressures are easing or strengthening.The technical focus for the morning videoEURUSD’s break below 1.1300 creates an immediate decision point. Staying below keeps pressure on the pair. Moving back above and holding would raise questions about the durability of the break. A break is one thing; sustained trading below the level is what sellers want to see.In the morning video above, I take a look at the three major currency pairs—EURUSD, USDJPY and GBPUSD—from a technical perspective. For each pair, I outline the bias, the risk-defining levels and the targets that would give either the buyers or sellers more control. This article was written by Greg Michalowski at investinglive.com.