USD benefits from…political stability?
The US dollar was mostly higher as, despite the ongoing US government shutdown, the greenback benefited from relative political stability.
Across other markets, the Japanese yen plunged 2.0% versus the US dollar after the election win for ruling-party conservative Sanae Takaichi caused markets to speculate about potentially lower interest rates.
In Europe, the sudden resignation of French prime minister Sebastian Lecornu caused the euro to fall, with the EUR/USD down 0.3%.
The USD index hit a two-week high.
Aussie inflation bounce boosts AUD
Australia’s inflation picked up again in September, with the Melbourne Institute’s index rising 0.4% after a 0.3% drop in August. Annual inflation edged up to 3.0%, and the Q3 average came in at 2.7%. The slower pace of cooling makes it harder to justify further rate cuts from the RBA.
Odds of a November cut have dropped to 40%, down from 76% two weeks ago.
The AUD/USD might be able to gain further, currently trading 5% below its September 2024 high of 0.6942.
Key support levels to watch: 50-day average at 0.6562 and 100-day average at 0.6523.
Takaichi pushes for smarter spending and stronger wages
In her first press conference as LDP leader, Takaichi called for responsible fiscal and monetary policy, stressing that the Bank of Japan should decide the best tools to manage the economy. She warned that Japan remains in a fragile state amid U.S. tariffs and cautioned against assuming deflation is over just because prices are rising.
Takaichi emphasized the need for demand-driven growth—where rising wages fuel spending, gradually lifting prices and boosting business profits. Until that happens, she said, the government must stay closely aligned with the BoJ.
She also backed targeted support for struggling households and businesses, arguing that smart investments can drive demand and grow tax revenue, even as fiscal discipline remains important.
USD/JPY has climbed to a two-month high at the time of writing with the break of 150.0 setting up a further potential move to the next key resistance level at 151.00.
USD higher again
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 6 – 11 October
Have a question? [email protected]
*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer
