Euro faces pressure against the dollar

The euro is weakening against the U.S. dollar as both the U.S. Federal Reserve (the Fed) and the European Central Bank (the ECB) are expected to make similar decisions on interest rates, with no changes anticipated in October and possible increases in December. This situation is already visible in financial markets and is unlikely to cause major shifts in the two currencies before January unless an unexpected event occurs, possibly related to U.S. inflation data for September, released on Wednesday.

Market expectations shift for rate changes

Investors' expectations about the Fed have changed quickly. Previously, there was a 75% chance of a rate increase on October 28, but now the probability is less than 20%. John Williams, a key Fed official, has said there is no rush, pointing to only 29,000 new jobs created in September. A rate increase is still seen as likely by December, with an 84% chance. The ECB is expected to follow a similar path, with a Reuters survey of 73 economists showing that 70 expect the ECB to keep its rate at 2.50% on October 29, and 64 expect a rate increase in December.

Attack on oil tankers raises energy prices

Riyadh was attacked this weekend, and oil tankers were targeted near the Strait of Hormuz, increasing pressure on energy prices. Winter budgets are being planned based on expensive fuel and dollar-denominated benefits that are unlikely to become cheaper. The euro has been falling for five weeks, reaching 1.1210 dollars this morning. Speculative bets against the euro have increased, with 99,300 contracts on Tuesday, October 6, up by 36,000 over seven days.

Market activity and currency movements

American debt markets, along with Canadian and Japanese markets, are closed this Monday, leading to fewer buyers and sellers. Oil prices reacted to news, with Brent opening at 105.48 dollars before dropping to 103.90 dollars after the U.S. hinted at Russian diesel circulation. Currencies remained almost stable: 1.5977 Canadian dollars for an euro this morning, 177.27 yen, the pound at 0.8463, and the Swiss franc at 0.9299. These levels are not yet certain until after Tuesday's session.

Thai currency strengthens

Thailand's currency, the baht, has strengthened for a month, with 37.57 bahts for an euro on October 9 compared to 38.31 on September 9. This affects the margins of resorts in Bangkok or Phuket priced at the start-of-the-year rate. Weekly supports and resistances for various currency pairs are outlined, indicating the expected price ranges during the week.

French budget review and U.S. inflation data

The French budget examination begins on October 13, with the National Assembly starting its review of the 2027 budget. The revenue part was rejected on Friday in the finance committee. The climax is expected on Wednesday, with the September U.S. inflation data anticipated to accelerate, with the part excluding food and energy remaining almost stable. A figure above expectations could reinstate a rate increase on October 28, benefiting the dollar. On Thursday, American consumption and British growth in August could influence the dollar and the pound. On Friday, Kevin Warsh, president of the Fed, will comment on the inflation figure for the first time before the meeting at the end of the month.