US dollar strength and euro weakness dominate
The US dollar starts the week near 18-month highs after another strong performance last week.
Rising US Treasury yields, resilient US economic growth and expectations that US interest rates may remain higher for longer continued to support the greenback.
Aside from the US dollar, the Aussie and Swedish krona were the only FX winners last week.
The euro remained under heavy pressure as concerns around France’s fiscal position intensified. EUR/USD fell to its lowest level since May 2025, while EUR weakened broadly against APAC currencies.
US shares remained resilient despite higher bond yields and oil prices, highlighting ongoing confidence in the strength of the US economy.
Aussie turns to local data
The Australian dollar was helped by the broader improvement in risk sentiment last week.
Consumer confidence fell to one of its weakest levels since the early 1970s, while services activity slowed and employment within the sector declined for the first time since May.
Against Europe, however, the Aussie continued to outperform, with AUD/EUR reaching two-year highs as weakness in the euro accelerated.
Attention now turns to a busy week of domestic data. NAB business confidence is due Tuesday, Westpac consumer confidence follows on Wednesday and Thursday’s labour force report is the week’s key event.
After a period of softer consumer and business surveys, markets will be watching closely for signs that labour market conditions are starting to weaken.
Inflation and growth data headline the week ahead
The key regional event is Wednesday’s China CPI report, which will provide an update on domestic inflation pressures and demand conditions.
Thursday’s Australian employment report is likely to be the most important event for AUD crosses this week, particularly following the recent decline in consumer confidence.
In Europe, ECB President Christine Lagarde speaks on Wednesday before Friday’s final eurozone CPI release.
Elsewhere, investors will continue monitoring US inflation expectations, Treasury yields and developments in European bond markets, which remain the dominant drivers of FX markets.
Aussie back near 0.7000
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 12 – 17 October
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*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.
