• AUD/USD +0.3% from Wed 0.70045 low in wake of hawkish RBA comments

• AUD probes 0.7034 100-DMA, likely to extend run toward 0.7075 55-DMA

• Futures pricing now implies 55.5% probability of 25 bps hike on Nov 3

• RBA Governor Bullock speech Fri, Assistant Governor Hunter interview Sun

• U.S. tech stocks lifted by earning positivity from SpaceX and Super Micro

• Overnight range 0.7018-36 support 0.6865 0.6834, resistance 0.7140 0.7282
AUD Daily 21/55/100-DMA


DXY Daily 55/100/200-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• GBP$ regained vigor in NY afternoon trade, +0.15% at 1.3399; NorAm range 1.3403-1.3381

• Despite slight gain pair anchored by 4-wk highs just above 1.34, capped by 50-DMA at 1.3409

• Today's above f/c UK CPI/PP data affirms expected 25bp rate hike by BoE in early Nov

• LSEG's IRPR indicating BoE rate hikes higher and faster than Fed boosting GBP

• UK Autumn Budget Nov 28 risks stalling bullish trend, though fiscal rules likely to be followed

• GBP$ res 1.3409 Tuesday high, 1.3433 flat 200-DMA, 1.3470 area upcoming cloud twist

• Supt 1.3381 Wednesday NorAm low, 1.3315 daily base line, 1.3268 Oct 16 low

GBP EOD Chart:

(Paul.Spirgel is a Reuters market analyst. The views expressed are his own)

• NY opened near 1.1235 after 1.1214 traded overnight, 1.1238 traded early NY

• Sellers emerged and 1.1215 traded as USD, US yields

moved up

• EUR/UDS bears couldn't maintain momentum as USD buying faded away

• Yields softened while oil & USD/CNH traded lower on the session

• Rallies in gold and equities contributed to the USD selling theme

• EUR/USD sat near 1.1235 late, was close to flat in NY's afternoon

• Daily long legged doji, monthly bull hammer candle are concerns for bears

• EUR/USD's hold above the 10-DMA also contributes to those concerns
eurusd

(Christopher Romano is a Reuters market analyst. The views expressed are his own)

Bank of America Global Research previews next week's UK Autumn budget due on Oct-28.

"With France the epicentre of market focus, it may be easy to forget that we are a little over 1 week away from the first John Healey Budget. The sense of anticipation (and perhaps apprehension) that has greeted recent Budgets is so far lacking and GBP seems agnostic to upcoming developments at least in the spot FX space. GBP/USD 1mth volatility is trading higher but this reflects the broader step adjustment in G10 FX vol vs USD as France dominates. Our options desk, however, notes that whilst front end vol remains well behaved, daily vol for GBP/USD is 13vol versus an average of 7.5vols. Whilst Budget Day appears well owned, GBP risk premium is close to the lows of the year," BofA notes.

"All in all, our economists think that the Government will deliver a cautious Budget and adhere to the Fiscal Rules. Tougher decisions await but this is for 2027 and not the here and now," BofA adds.

• USD/CAD finding support at the 100-day MA (1.4043), with two attempts to break failing so far

• Initial resistance at 1.4077 is capping and keeping rebounds shallow for now

• On balance, sellers remain broadly in control. Further hurdles sit at the 100-hour MA cluster (1.4110)

• A break below1.4043 exposes the 50% fib of the Sep-Oct rise at 1.4030, then the Fed Sep pivot point at 1.3940

• The BoC is near fully priced to hike next week, after hawkish Macklem comments

• However, recent data (CPI + jobs) has come in softer than expected, which could see some caution creep in for CAD
USDCAD hourly chart


USDCAD daily chart

Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))

Goldman Sachs changes its RBA rate call.

"In a fireside chat at Citi's ANZ Investment Conference this morning, RBA Deputy Governor Andrew Hauser delivered remarks we view as clearly hawkish. We now expect the RBA to hike by 25bp to 4.85% at its November meeting (previously on hold at 4.60%)," GS notes.

"Last week, we viewed then pricing in financial markets as significantly underestimating the risk of a November rate hike (15% probability vs. GS: 35% probability). Today’s remarks suggest the RBA continues to see risks to inflation and inflation expectations as tilted to the upside even with the delivered 100bp tightening year-to-date and in our view - absent a downside surprise in the 3Q2026 CPI report (due 28 Oct) - make a further hike in November more likely than not. Beyond this, our base case is that the RBA holds the policy rate at 4.85% until a gradual easing cycle begins in 2H2027," GS adds.

Sterling remains anchored by four-week highs near 1.34, buoyed by Wednesday's stronger-than-expected UK CPI and PPI data, alongside other recent upbeat economic indicators, reinforcing expectations for a Bank of England rate hike at the upcoming November 5 Monetary Policy Committee meeting.

The inflation figures, which exceeded the BoE's target, have significantly increased market expectations for rate increases. LSEG's IRPR now suggests a near 100% probability of a 25 basis point hike in November, with a total of 114 basis points of hikes anticipated by December 2027. These BoE expectations outpace those for the Fed, which is largely expected to hold rates steady on October 28, with only 78 basis points of hikes priced in by December 2027.

Recent IMM positioning data showed a substantial short bias in GBP, with specs short approximately 107,000 contracts, valued around $8.9 billion. Given sterling's recent rally, this short position has likely been pared. My IMM metric previously indicated specs were short nearly 55% of all positioning, signaling a strong buy, a condition that has likely lessened given sterling's nearly 1% rise in the recently closed IMM period.

Headwinds remain. Next week's UK Autumn Budget must balance taming inflation against stimulating growth—no easy feat. The Oct 28 Fed decision looms too, with Chair Kevin Warsh's no-guidance practice lifting market volatility as futures eye a less-hawkish path.

For now, with the BoE's hawkish outlook and ongoing USD unwinding, bullish momentum for GBP/USD appears strong, targeting resistance at the upcoming daily cloud twist in the 1.3470s and possibly the September 9 high at 1.3566. Bears will need to breach the rising 10-day moving average at 1.3281 to regain control.
GBP Chart:

(Paul Spirgel is a Reuters market analyst. The views expressed are his own)

Credit Agricole CIB Research on the scope for revising its GBP forecasts (currently at 1.31 for GBP/USD and 0.86 for EUR/GBP by year-end).

"The GBP’s resilience vs the USD and its outperformance vs the EUR so far this year has surprised us and reflects the positive impact of several key drivers that, if sustained, could pose risks to our current GBP/USD and EUR/GBP forecasts.

The UK economy has proven to be more resilient so far in 2026 than forecasted by us and the market....UK markets expect four rate hikes in the coming months, making the BoE one of the most hawkish central banks and the GBP one of the most attractive high-yielders in G10...France’s fiscal problems continue to contrast with the ‘prudence’ of the Burnham government and boost the appeal of the GBP as a safe- haven EUR-proxy," CACIB notes.

"We continue to assess the impact of the above drivers on our FX outlook. We would delay any decision on the GBP forecasts, however, until after next week’s Autumn statement and the BoE policy meeting the week after," CACIB adds.

• EUR/USD -0.1%, USD/JPY -0.06%, GBP/USD 0.09%, AUD/USD 0.38%

• S&P E-minis 0.14%, DAX 0.51%, Nikkei 225 0.85%, FTSE 0.01%

• EUR/USD calm masks mounting stress as French yield hits 5%

• USD/JPY dips on BOJ deputy, but cloud and October underpins

• GBP/USD 1.34 provides resistance; BoE expectations in focus

• AUD/USD scales three-week peak on RBA's hawkish Hauser

• ​Option expiries . U.S. Open ​

(Martin Miller is a Reuters market analyst. The views expressed are his own)

• EUR/GBP falls to 0.8373, its lowest level since May 2025

• Pound benefits from hawkish BoE expectations after hot UK CPI data

• BoE rate hike expected on Nov 5 (ECB rate hold expected next week)

• Euro weighed down by French debt concerns, higher gas prices

• 10-year French government bond yield rises to 5%, highest since 2002

• Pound set for biggest monthly gain against euro since May 2023

EURGBP

(Robert Howard is a Reuters market analyst. The views expressed are his own)

• French 10-year bond highs hits 5%, highest since July 2002

• Spread with Germany widest this year at 160bps

• Brent above $110 per barrel

• EUR/USD surprisingly quiet trading 1.1214-34 EBS

• Traders betting $19 billion are well prepared for euro to drop

• Japanese yen faces acute version of energy shock

•
French bonds and eurusd

(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

• USD/JPY has slipped as BOJ Deputy Governor Himino stated policy remains loose despite hike

• Spot edged down to 158.03 from 158.39, on Wednesday, on the EBS

• However, the overall bias remains on the upside as USD/JPY usually climbs in October

• The thick cloud, that currently spans the 155.73-158.44 region, continues to underpin

• USD/JPY and EUR/JPY tend to move in tandem, 30 and 60-day log correlations are high above +0.5

Daily Chart


Correlation Chart

(Martin Miller is a Reuters market analyst. The views expressed are his own)

• EUR/USD holds low 1.12s, yet dealers report renewed demand for downside strikes this week

• 1-month 25-delta risk reversal back to 0.45 favouring EUR puts, after sliding from 0.9 to 0.25 last week

• French debt worries and gas above €90/MWh, a first since Dec 2022, keep pressure on the euro despite softer USD

• Topside demand largely absent: little appetite for EUR calls, while 1-month implied vol regained 6.5 from 6.1 this week

• 6-month vol should stay supported vs shorter tenors since including April's French election first round this week
EUR/USD FXO implied volatility


EUR/USD 25 delta risk reversals-

(Richard Pace is a Reuters market analyst. The views expressed are his own)

• FX option strikes expire at 10am New York/14:00 GMT on Wednesday October 21

• EUR/USD: 1.1175-80 (482M), 1.1195-1.1205 (4.9BLN), 1.1225-30 (1.1BLN), 1.1250-60 (1BLN)

• 1.1270 (1.4BLN), 1.1280-90 (1.2BLN)

• EUR/CHF: 0.9300 (723M). EUR/GBP: 0.8390 (370M), 0.8440 (742M)

• GBP/USD: 1.3210 (872M), 1.3380-85 (398M), 1.3390-95 (471M)

• AUD/USD: 0.6940 (450M), 0.6950-60 (1.4BLN), 0.6970-80 (371M), 0.7000 (221M), 0.7120 (252M)

• NZD/USD: 0.5675 (248M), 0.5700 (292M). AUD/NZD: 1.2350 (464M)

• USD/CAD: 1.4000-10 (526M), 1.4150 (480M)

• USD/JPY: 156.50 (1.3BLN), 156.95-157.00 (280M), 158.00 (1.6BLN), 158.15 (251M), 158.50 (590M)

• FX options wrap - EUR/USD downside protection reemerges (Richard Pace is a Reuters market analyst. The views expressed are his own)

• USD/JPY bobs up to 158.15 after probing 21 DMA support 158.05

• A Wed close below 55 DMA 157.79 would be conclusively bearish

• Momentum to increase if Bollinger downtrend channel 157.60 engaged

• BOJ deputy gov says conditions remain loose despite hike

• Fuels expectations for another tightening, but likely in Dec

• Nikkei +1.1% despite oil prices inching up again; Brent +1.5%
JPY

(Ewen Chew is a Reuters market analyst. The views expressed are his own.)

• USD/JPY slips a tad to 158.11 after early Wed blip up to 158.39

• Back under 158.44, the 50% retracement of July-Sept downturn

• For now propped up by 21 DMA 158.04, and 55 DMA 157.79

• If those supports crack, Bollinger downtrend channel 157.60 beckons

• US yields on the retreat again, weighing on USD broadly in Asia

• Japan finmin sees shift to wage-driven inflation phase
JPY

(Ewen Chew is a Reuters market analyst. The views expressed are his own.)

• GBP/USD unchanged in Asia after closing 0.55% higher Tuesday

• Consolidates following rally to a 1-mth high on strong UK labour market data

• UK jobs figures latest in string of better-than-forecast economic data

• UK employer pay awards edge up to 3.1%, Brightmine says

• Money markets almost fully price 25 bps BoE hike on November 5

• Sep inflation data Wed may cement Nov hike; CPI seen up 3.4% vs Aug 3.1%

• BoE policymaker Greene says inflation risks are bigger than thought

• Resistance 1.3405-10, 1.3435-40 ; support 1.3340-50, 1.3300-10

• Range Tuesday 1.3306-1.3409, Asia 1.3371-1.33785
GBP:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

• Shares of Northern Star rise as much as 4.4% to A$25.700, hitting their highest level since March 12

• Gold miner reports September-quarter revenue from gold sales of A$1.82 billion ($1.28 billion), up 7.2% from A$1.70 billion a year earlier

• Company says average realised gold price rose to A$4,999 per ounce from A$4,452 a year earlier

• YTD, stock down 5.3%, including the session's moves

($1 = 1.4269 Australian dollars)

(Reporting by Paridhi Minda in Bengaluru)

• AUD/USD +0.1% Wed after RBA's Hauser says inflation outlook materially worse

• Futures pricing implies 42.7% chance of Nov RBA hike, up from 29% late Tue

• RBA Governor Bullock speech Fri, Assistant Governor Hunter interview Sun

• AUD extending toward 0.7034 100-DMA, upswing may accelerate above

• Brent crude +0.6% to $109.46 a barrel in Asia, gold -0.1%, DXY +0.1%

• France to deploy military in response to civil unrest, markets remain wary

• Range Asia 0.70045-121 support 0.6865 0.6834, resistance 0.7282
AUD Daily 21/55/100-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

• Little change in USD/JPY, Asia so far 158.14-30 EBS

• Holding below 158.57 200-DMA, near top of 155.73-158.44 daily Ichi cloud

• Near top of 158.12-29 ascending hourly Ichimoku cloud too

• Downside limited to 157.83 in late London, early US trading yesterday

• Japanese exporter offers on rallies, importers at Tokyo fixes and on dips

• Option expiries today include 158.00 $1.6 bln, 158.15-159.00 total $1.6 bln

• More massive in area tomorrow, to continue to help contain spot action?

• JGB-US Treasury rate differentials wider, 2s @286, 10s @222 bps

• Latest poll shows most eyeing December BOJ rate hike

• That said, Policy Board dissents seen negative for the Japanese yen

• Related comments , , ,

• And , , also

• US markets , , ,
USD/JPY:


USD/JPY nearby option expiries this week:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• NZD/USD +0.4% from Tue 0.56625 low as pair's week-long rally continues

• NZ Q3 CPI update due Thur, Reuters poll consensus +0.8% q/q, +3.8% y/y

• Futures pricing now implies 91% probability of 25 bps RBNZ hike Oct 28

• Brent crude -0.4% as Russian diesel starts to flow after sanctions lifted

• France to deploy military in response to civil unrest, markets remain wary

• NZD remains clear above 0.5634 21-DMA, may extend towards 0.5775 zone

• Range NZ 0.56811-87, support 0.5566 0.5485, resistance 0.5995 0.6012
DXY Daily 55/100/200-DMA


NZD Daily 21/55/100-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)

JP Morgan Research previews the incoming US Midterm Elections on Nov-3.

"Democrats are now favored to win both the House and Senate. However, because they are expected to fall short of the 2/3 majority in both chambers of Congress (needed to override a presidential veto), JPMorgan research views the passthrough of the election to FX as limited, with low first-order impacts on the market," JPM notes.

"However, second-order impacts are still in play through the following policy channels: fiscal, trade, foreign policy, and FX policy, with JPMorgan seeing the strongest implication for FX from fiscal policy," JPM adds.

• AUD/USD +0.4% from Tue 0.6971 low as broad USD index softens -0.3%

• RBA Deputy Governor Hauser fireside chat at Citi investment conference Wed

• RBA Governor Bullock speech Fri, Assistant Governor Hunter interview Sun

• AUD extends toward 0.7035 100-DMA, may break higher if RBA ups hawkishness

• France to deploy troops in response to civil unrest, markets remain rattled

• Brent crude -0.6% as Russian diesel starts to flow after sanctions lifted

• Overnight range 0.69835-0.7017 support 0.6865 0.6834, resistance 0.7282
AUD Daily21/55/100-DMA


DXY Daily 55/100/200-DMA

(James Connell is a Reuters market analyst. The views expressed are his own.)