AUD and CAD Outperform on Separate Catalysts as French Yields Eyeing 5%
Australian and Canadian Dollars are leading major currencies on Monday, but the gains are far from evidence of a broad risk-on rally. Aussie is benefiting from stronger-than-expected Chinese economic data and reduced conviction that RBA tightening has finished. Loonie, meanwhile, has retained much of its strength despite softer Canadian core inflation, supported by elevated oil prices.
GBP/USD Reversal Test: Can UK CPI Sustain BoE Tightening Bets Beyond November?
A November BoE hike is 93.2% priced, but economists are far less convinced about what follows—with this week's UK wages and September CPI data set to decide whether December tightening gets closer to certainty, just as GBP/USD tests the key 1.3341 Fibonacci resistance.
EUR/CAD Gaps Lower as French Unrest Amplifies Fiscal Risks, Oil Supports CAD
EUR/CAD gapped sharply lower at the weekly open, falling from 1.6269 to as low as 1.5777, as violent weekend unrest in France compounded an already elevated fiscal risk premium while Canadian Dollar held onto support from Friday's oil surge—with Tuesday's French budget vote and Friday's Moody's review now the key tests of whether the breakdown toward 1.5733 and 1.5610 extends.
Dollar Extends Slide as Fed Warsh Refuses to Revive October Hike Bets
The Dollar extended its broad-based decline on Friday as Federal Reserve Chairman Kevin Warsh offered no indication that another rate hike was becoming more urgent at the October 27–28 FOMC meeting, despite hotter-than-expected CPI and PPI reports. According to CME FedWatch, the probability of an October hike dropped from 27.7% to 16.1%, while the Dollar Index fell toward 101.69.
