EUROPEAN FX UPDATE: DXY flat awaiting US ISM Services, JPY lags post-Ueda

DXY: -0.1%, 97.75

• USD is flat today and currently trades within a very narrow 97.75 to 97.94 range; most recently, some modest pressure has been seen in the Dollar, but without a clear driver. From a technical perspective, DXY currently trades at the midpoint of the prior day’s range; and on either side of its 21 DMA (97.61) and 50 DMA (98.04).


• Nothing really too pertinent for the Dollar by way of newsflow; some focus has been on President Trump, where he stated that he is considering taxpayer rebates of USD 1,000–2,000 funded by tariff revenue, according to Reuters. Elsewhere, the WSJ reported that Trump is looking to send billions in cash bailouts to farmers with taxpayer money.


• Of course, the overarching event has been the US Government shutdown, which means there will be no publication of September’s NFP report. Despite this, CNN suggests that the data has already been collected, with Senator Warren calling on the Trump administration to release the report.


• With the jobs report now shelved, focus will now be on US PMIs and ISM Services. The former is generally overshadowed by the ISM report; on that, the consensus expects the headline to fall slightly to 51.8 from 52.0 in September; the business activity gauge is seen falling to 51.8 from 55.0. Additionally, a handful of Fed officials are scheduled today.

EUR: +0.2%, 1.1738

• EUR is on a slightly firmer footing today, but without a clear driver. The bulk of the marginal upside was seen around the European cash open and continued to trend higher on the releases of European PMIs.


• To recap those PMIs, Spain Services and Italian Services both beat expectations whilst the French, German, and then the EZ-wide metrics were revised a touch lower. The EZ release highlighted that the data will likely “confirm the stance” for those ECB members who opt for no more cuts. Sticking with the ECB, some very marginal upside was seen in the single-currency after ECB President Lagarde said former ECB member Knot would make a “good” President at the Bank, via ANP; for reference, Knot was a hawkish member during his tenure. Now focus will turn to ECB’s Schnabel later in the day, who is also speaking at a Knot farewell symposium.


• On the French side of things, PM Lecornu said will renounce the use of 49.3 to pass the French Budget, adding that this move will hopefully open new grounds for compromise with opposition parties. A positive move from the new PM, sparking some modest upside in OATs / CAC 40 futures but no real follow through to the EUR at the time.

JPY: +0.1%, 147.32

• JPY is the worst-performing G10 currency, albeit very marginally so. Focus overnight has been on BoJ Governor Ueda, who stressed the importance of maintaining an accommodative monetary environment to support the economy – these comments sparked some modest pressure in the Yen. As it stands, markets currently assign a 64% chance of a hold at the October meeting.


• Ueda aside, focus will be on the weekend’s LDP election. In brief, polls currently suggest Takaichi as the favourite, followed closely by Koizumi; ING suggests that the former would be seen as more bearish for the JPY.


• USD/JPY currently trades in a 147.09 to 147.81 range; the peak for the day has marginally surpassed both its 50 DMA (147.77) and its 21 DMA (147.75). Next level to the upside includes Wednesday's high at 148.22 and then its 200 DMA at 148.25 thereafter.

GBP: +0.1%, 1.3452

• GBP is incrementally higher today and trades in a 1.3430 to 1.3467 range, and towards the midpoint of the prior day’s range. Today’s focus has been on the region’s Final PMI metrics, where the Services component was subject to a decent downward revision to 50.8 (prev. 51.9); as such, the Composite moved lower to 50.1. The accompanying release highlighted that corporate clients are deferring spending decisions until after the Autumn budget.


• BoE's Bailey also on the docket today.

Antipodeans: AUD +0.1%, NZD +0.2%

• Antipodeans are both slightly firmer vs the Dollar, and with some very modest outperformance in the Kiwi. Nothing really driving the upside today, but perhaps buoyed by the continued upside in base metals prices. AUD/USD currently trades around 0.6606, and towards the lower end of the prior day's range; NZD/USD currently edging back towards Thursday's peak at 0.58429, which also coincides with its 200 DMA.

03 Oct 2025 - 10:26- ForexEU Research- Source: Newsquawk