USD
The dollar ended Monday’s holiday-thinned session firmer, seeing the touch its highest level since April 2025. With US cash Treasuries shut for Columbus Day, crude did the driving. initially dipped toward $103 overnight on an unconfirmed Trump post about a Russia-Ukraine “energy ceasefire”, then reversed to close above $106, its highest since mid-September, after fresh Houthi missile attacks on Riyadh, and another tanker strike in the Strait of Hormuz. Cleveland Fed President Hammack added to the bid, warning of early signs that inflation expectations are drifting and that more restraint is needed, leaving a December hike fully priced. As we flagged yesterday, dollar dips should stay shallow into tomorrow’s CPI, where we expect an in-line print. Today brings Governor Waller at 08:45 BST, Barkin and Collins later, and the NFIB survey, all unlikely to prove major market movers.
EUR
has slumped lower to start the week, trading below 1.12 this morning. The fiscal backdrop remains the main constraint, alongside downside pressure from oil. France’s 2027 budget reaches the National Assembly floor today, and we see little prospect of real progress, which keeps the risk of adoption by decree, and the political fallout that would bring, firmly on the table. As we noted in our week ahead, we see no reason to chase euro gains until US CPI is out of the way, given the political backdrop. Today also brings German final September inflation and the IMF’s WEO, which puts eurozone growth at just 1.1% this year, while flagging a 41% rise in oil prices. As a large energy importer, the eurozone is most exposed among the majors should Houthi escalation push crude higher again, keeping 1.11 the key downside level.
GBP
Sterling fared better than most on Monday, albeit with still slipping lower as a dollar bid returned alongside higher oil. On crosses, however, hawkish BoE commentary helped sterling at the margin: Mann warned that services inflation will be hard to lower without further hikes, and overnight Greene said waiting for second-round effects “will be too late” and that policy is “not that restrictive”. Markets now price roughly a 90% chance of a hike on November 5th, and BRC like-for-like sales, also published overnight, rose 1.0% in September, beating expectations to add additional support. With no tier-one UK data today, cable will follow the dollar into CPI, but we maintain our bearish bias into the October Budget, with Thursday’s GDP print the next domestic test of note.
CAD
The loonie had a quiet Thanksgiving session, with tracking sideways through liquidity-thinned trading. Indeed, with ’s recovery to around $93 on Middle East escalation, the loonie found a cushion that other G10 currencies lack. We do not think oil changes the domestic picture, however. Friday’s 68k fall in employment, the second consecutive decline, with participation at its lowest since 1997 outside the pandemic, should settle the Bank of Canada’s October debate in our view. We continue to expect a hold at 2.25% on the 28th, while markets still price around a one-in-four chance of a hike, a residual we think will be unwound once the September CPI print fails to show the broadening price pressures. With no Canadian data today and Governor Macklem not speaking until tomorrow in Bangkok, USDCAD trades as a function of US CPI expectations, oil and the broader dollar, implying little change near term.
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