Euro Rebounds, Sterling Holds Firm as Dollar Stays Near 18-Month High
EUR/USD Rebounds to 1.1229 Off 17-Month Low, GBP/USD Firm at 1.3237, USD/CAD Steady at 1.4215 Before Canada Jobs, USD/CHF Slips to 0.8309, GBP/JPY Gains to 209.41
The dollar is holding just below its 18-month high on Friday, with the dollar index around 102.00 after testing 102.50 this week, while the euro, sterling and the Aussie recover modestly. EUR/USD bounced to about 1.1229, up 0.18%, after touching a 17-month low of 1.1161 earlier this week, and GBP/USD is near 1.3237 on BoE hike bets. Treasury yields eased after Thursday's 30-year auction and President Trump's pledge of no Iran strike before the 3 November midterms, but remain historically elevated. FOMC minutes pointed to further tightening eventually without urgency, US jobless claims fell to 197K and September payrolls were only +29K, a "low hire, low fire" mix that complicates the Fed.
Focus today: Canada's September jobs report (12:30 GMT; consensus about +6K and a 6.5% jobless rate after August's 41.7K loss), UoM preliminary sentiment (14:00 GMT; about 47.6 vs 48.1, with inflation expectations the key line), the Fed's Collins (20:00 GMT) and weekend Iran and Hurricane Isaias headline risk. USD/CAD is about 1.4215, USD/CHF 0.8309 and GBP/JPY 209.41, with USD/JPY near 158.20. Prices for the five main pairs are from daily charts taken at 11:58-11:59 IST on 9 October; the Canadian jobs data had not yet been released.
Top Stories Moving the Market
Euro bounces off 17-month low
EUR/USD rebounds to about 1.1229 from the 1.1161 low as the dollar eases slightly, though French fiscal risk and elevated yields still cap gains.
Sterling holds firm on BoE bets
GBP/USD trades near 1.3237 as BoE hike expectations and a modest dollar pullback offset 28-year-high gilt yields (PoundSterlingLive).
Loonie steady before jobs data
USD/CAD sits near 1.4215, below the 1.4293 peak, with Canada's jobs report due at 12:30 GMT and Scotiabank flagging consolidation (Scotiabank).
Franc firms on safe-haven demand
USD/CHF slips to about 0.8309 as geopolitical uncertainty supports the franc; Swiss CPI of 1.0% keeps the SNB at 0% (SNB).
Cross rebounds as yen softens
GBP/JPY climbs to about 209.41 as USD/JPY edges toward 158.20; intervention talk and receding BoJ hike bets keep the yen two-way.
Dollar holds near 18-month high
The dollar index is around 102.00, just under this week's 102.50 test, as yields ease from Thursday's highs but stay historically elevated.
Technical Summary & Trade Ideas
EUR/USD
FX · French fiscal risk, hawkish Fed, ECB hike betsEUR/USD trades near 1.1229, up about 0.18%, bouncing from the 1.1161 17-month low inside a falling channel on the daily chart. The daily RSI near 29 is oversold, which favours a corrective bounce, but the 20-day average near 1.1361 sits well above price, and French fiscal worries, eurozone inflation at 3.8% and a dollar index near 102 keep the trend bearish. A market poll sees the ECB holding on 29 October and hiking only in December. Support is 1.1200 then 1.1161; resistance is 1.1250 then 1.1300, and a close above 1.1300 would be needed to shift the picture. Levels are conditional.
GBP/USD
FX · BoE hike bets, gilt stress, hawkish FedGBP/USD trades near 1.3237, edging up after Thursday's bounce from the 1.3185 low, still inside a falling channel with the daily RSI near 40. Sterling is holding up better than the euro as markets expect restrictive BoE policy: Mann says above-target inflation looks embedded and could reach 4% around year-end, markets price a November rise, and the UK 30-year gilt yield has topped 6%. A firm dollar and elevated US yields cap rallies: 1.3277 (Tuesday's close) is first resistance, then 1.3300 and the 20-day average near 1.3293. A slide under 1.3180 exposes the 1.3140 year-to-date low. Levels are conditional.
USD/CAD
FX · Canada jobs data, Fed-BoC gap, Scotiabank consolidationUSD/CAD trades near 1.4215, down about 0.07%, ahead of Canada's September jobs report at 12:30 GMT. The daily chart shows price well above rising averages (20-day near 1.4125) with the RSI easing from overbought near 72 to about 65. Consensus is roughly +6K jobs and a 6.5% unemployment rate after August's 41.7K loss. A strong print (above +30K, unemployment 6.4% or lower) would lift BoC hike odds and pull the pair toward 1.4180-1.4150; a weak one could lift it through 1.4230 toward the 1.4293 high, the highest since April 2025. Scotiabank puts fair value at 1.4191. Levels are conditional.
USD/CHF
FX · Safe-haven franc, SNB at 0%, Fed hike pathUSD/CHF is trading near 0.8309, down about 0.09%, inside a rising channel on the daily chart with the 20-day average and channel support near 0.8275 and the RSI around 61. The franc benefits from geopolitical uncertainty and Swiss September inflation of 1.0% keeps the SNB on hold at 0%, while a Fed expected to tighten again later this year underpins the dollar. Support sits at 0.8275 then 0.8225 (2 October low); resistance is 0.8330-0.8360. A daily close below 0.8275 would break the channel and weaken the uptrend. Levels are conditional.
GBP/JPY
FX · Yen intervention risk, BoJ expectations, sterlingGBP/JPY is up about 0.36% near 209.41 (a high of 209.48 so far), rebounding inside a falling channel on the daily chart with the RSI near 47. Price sits above the 20-day average near 209.00 but well below the 50-day near 211.81 and the 200-day near 213.68, so rallies face heavy overhead supply. Japanese intervention speculation, hotter Tokyo CPI and PM Takaichi's food-tax cut plan keep yen volatility high, while receding BoJ hike expectations and elevated US yields limit yen gains. A break below 209.00 opens 208.00, while a close above 211.80 would challenge the bearish structure. Levels are conditional.
Elsewhere in Forex Markets
Dollar firms against the yen
USD/JPY edges up toward 158.20, tracking Treasury yields, with 158.30 the key resistance and intervention talk capping upside; derived from GBP/JPY and GBP/USD.
Aussie rebounds toward 0.7000
AUD/USD recovers to about 0.6975 on a modest improvement in risk sentiment; 0.7000 is the barrier and 0.6950 first support.
Kiwi bounces from yearly lows
NZD/USD rebounds to about 0.5615 after touching its lowest since late 2025; 0.5630 is first resistance and 0.5590 support.
Euro edges up on sterling
EUR/GBP ticks higher as the euro's rebound slightly outpaces sterling; the cross is derived from EUR/USD and GBP/USD.
Euro-yen firms with euro and dollar
EUR/JPY rises as both the euro and USD/JPY gain; the cross is derived from EUR/USD and USD/JPY.
What Is Moving the Market
Fed, yields and the dollar
FOMC minutes show most officials see another hike as eventually appropriate, but without urgency for a rapid series; markets price roughly 85bp of Fed tightening by the end of next year, with a pause in October and a December hike seen as more likely. Jobless claims of 197K and payrolls of +29K show weak hiring without layoffs, and the dollar index sits near 102 (Federal Reserve, UOB).
Euro and ECB
Eurozone inflation hit 3.8% in September, the highest since 2023, and markets price roughly 75bp of ECB tightening by the end of next year. French fiscal risk and Spain's snap election on 29 November weigh on the euro, and a market poll sees an ECB hold on 29 October and a hike in December (ING).
Sterling and BoE
BoE's Mann says above-target inflation looks embedded and could reach 4% around year-end. The UK 30-year gilt yield broke above 6% on 1 October for the first time since 1998, and markets price a BoE rise in November.
CAD, CHF and yen
Canada's labour data is due today ahead of the BoC decision on 28 October, Swiss CPI of 1.0% keeps the SNB at 0%, and the yen is near 158 per dollar amid intervention talk and receding BoJ hike bets.
Economic Calendar / Events
| Time | Country | Event | Result / Watch |
|---|---|---|---|
| Thu 8 Oct | US | Initial jobless claims | 197K vs 200K forecast, 199K prior; layoffs remain very low |
| Thu 8 Oct | US | 30-year Treasury bond auction | Stopped at 5.618% vs 5.308% prior; yields eased afterwards |
| Thu 8 Oct | US | President Trump on Iran | Says no attack before 3 November midterms; yields pulled off highs |
| 12:30 GMT | Canada | Labour Force Survey (Sep) | Consensus about +6K jobs, unemployment 6.5% vs 6.4%; August -41.7K |
| 14:00 GMT | US | UoM consumer sentiment (prelim, Oct) | Consensus about 47.6 vs 48.1; one-year inflation expectations prior 4.6% |
| Intraday | Euro area | ECB's Cipollone and Schnabel speak | Watch for signals on a December hike and French fiscal risk |
| 20:00 GMT | US | Fed's Collins speaks | Another read on the hike path after hawkish minutes |
| Late Fri / Sat | US | Hurricane Isaias landfall | Weekend headline risk |
| Tue 13 Oct | AU / UK | RBA minutes; BRC retail sales monitor | Secondary risk for AUD and GBP |
| Wed 14 Oct | US | September CPI | Decides December hike pricing, yields and USD direction |
| 28 Oct | US / Canada / UK | FOMC and BoC decisions; UK Budget | Fed pause is the base case; BoC at 2.25% in focus |
| 29 Oct | Euro area | ECB decision | Hold expected, December hike priced |
| 5 Nov | UK | Bank of England decision | Hike risk after Mann's warning on embedded inflation |
Summary
FX is cautious into the US session, with the dollar index near 102.00 and holding just below its 18-month high. EUR/USD (1.1229) has bounced from its 17-month low of 1.1161 but stays capped by French fiscal worries, eurozone inflation at 3.8% and elevated yields, while GBP/USD (1.3237) is supported by BoE hike bets despite 28-year-high gilt yields. USD/CAD (1.4215) waits for Canada's jobs data at 12:30 GMT, USD/CHF (0.8309) is firmer on the franc's safe-haven demand within a rising channel, and GBP/JPY (209.41) is rebounding inside a falling channel with intervention talk keeping the yen two-way. The Fed minutes point to further tightening eventually, though weak hiring (payrolls +29K) and low jobless claims (197K) complicate the path. Trump's pledge of no Iran strike before the midterms eased risk, but Hurricane Isaias and Middle East headlines leave weekend risk elevated. Next tests: Canada jobs, UoM inflation expectations at 14:00 GMT and Collins at 20:00 GMT, then US CPI on 14 October.
FAQ
Q:Why is EUR/USD rebounding but still vulnerable?
A:The pair bounced to about 1.1229 from a 17-month low of 1.1161 as the dollar eased slightly and the daily RSI sat oversold near 29, but French fiscal concerns, a firm dollar near 102 and elevated yields still cap the euro, with 1.1250 and 1.1300 the resistance levels.
Q:What are the key levels today?
A:EUR/USD 1.1200/1.1250, GBP/USD 1.3200/1.3277, USD/CAD 1.4180/1.4230, USD/CHF 0.8275/0.8330, GBP/JPY 209.00/210.00. These are conditional references, not forecasts.
