Dollar Dominates as Euro and Pound Struggle for Momentum.

• USD: Continues to be the default refuge in the current environment. The lack of fresh U.S. data (due to the shutdown) is propping the dollar, but its next moves will depend heavily on any surprise data or policy signals.

• EUR: Is under even more relentless pressure versus USD, and unless European data and sentiment improve, downside risks dominate.

• GBP: Remains under downward pressure versus the dollar, with weak domestic data and fiscal uncertainty limiting upside.

USD: 

• The dollar remains the primary beneficiary of risk-off flows and safe-haven demand amid uncertainty in the U.S. fiscal and data landscape.

• The U.S. data blackout (due to the federal government shutdown) is limiting fresh impetus for dollar weakness, enhancing its relative support.

• That said, with markets lacking fresh domestic catalysts, the dollar’s path may increasingly depend on any surprises in the limited data that do come through (e.g. PPI, retail sales, unemployment).

• Broad consensus across some forward-looking outlooks expects the dollar to gradually soften later in Q4, as global growth stabilizes and central banks in Europe/UK face rate pressures.

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EUR: 

• EUR/USD has been under sustained pressure amid dollar strength and geopolitical/political noise in Europe (notably in France).

• The pair is trading close to 1.1537, having declined from mid-1.17s levels over recent sessions.

• Technical and fundamental signals lean bearish: recent forecasts point toward further downside, with limited upside unless the eurozone can mount a visible recovery.

• ING, for example, warns that a break below 1.16 could open the door to moves toward the 1.1500 area.

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GBP: 

• Over the past month, sterling has weakened roughly 1.8 % versus the dollar.

• Sterling dropped to two-month lows against the dollar recently, reflecting renewed concerns over the U.K.’s fiscal trajectory and weak labour/wage data.

• Bank of England officials, including Chief Economist Huw Pill, have signalled a conservative, inflation-focused stance for rate policy, emphasizing that combating inflation remains paramount—even in light of growth risks.

• Domestically, muted wage growth (noted to be at multi-year lows), slow labour demand, and upcoming fiscal measures in the November Budget are weighing on sentiment.

Economic Calendar