Published: 10/21/2025

Overall Market Sentiment: Mixed. Easing U.S. credit jitters and a mild hawkish repricing into the Oct 29 FOMC are firming the dollar while stocks hold up and commodities cool. Friday’s rescheduled U.S. CPI (Oct 24) is the swing factor for follow-through on yields, risk, and the greenback.

Currency Outlooks

🔺 USD: Fed funds futures keep an October cut nearly a done deal, and December remains well-priced pending CPI. With 2s hovering in the mid-3.4s and 10s near 4.0 percent, a modestly positive 2s10s slope limits runaway USD weakness if risk stays calm. Into Friday, consensus looks for headline CPI near 3.1 percent YoY; a hotter print should lift the front end and extend the USD rebound. Key tells: DXY constructive while above the prior pivot; EURUSD pullbacks toward 1.160 guide dollar tone.

⚖️ EUR: Still a U.S. yields story. Calmer credit and a firmer dollar argue for range trading into Thu’s Eurozone flash PMIs. Support 1.160 then 1.155; resistance 1.170 to 1.173. France’s spread wobble has stabilized but remains an overhang on spikes.

⚖️ GBP: UK CPI prints Wed, Oct 22. A downside miss tightens BoE cut pricing and caps sterling; a firm print keeps 1.33–1.35 intact alongside broader USD tone. Watch services PMI Thu.

🔻 CAD: Canada CPI is today (Tue). Consensus points to roughly low-2s YoY while WTI near $57 keeps CAD on the back foot. Bias remains buy-the-dip in USDCAD unless crude reclaims the low-60s. Levels: 1.3970 support, 1.4100 resistance.

⚖️ CHF: SNB policy rate 0.00 percent. With risk not stressed, EURCHF 0.9280–0.9380 is the cleaner lens than USDCHF, which will track the USD leg.

🔻 JPY: USDJPY low-151s as wide differentials and calmer risk persist; intervention risk rises toward 153–155. New leadership headlines are in the mix, but U.S. front-end remains the key driver into CPI.

⚖️ AUD: Flash PMIs and global risk lead; jobs softness already nudged local cut pricing into late Q4. Support 0.6450; resistance 0.6600.

⚖️ NZD: Sensitive to risk and AU-NZ spreads into Thu PMIs; 0.5700–0.5720 first demand, 0.5780 supply.

🪙 Gold: The record run paused as the dollar firmed. Pullbacks toward the low-$4,300s look tactical while Fed easing remains in play; a soft CPI likely reignites momentum.

🛢 Oil: WTI ~ $57 on oversupply and contango. Weak crude softens CAD and reinforces disinflation into late-month decisions.

📈 Stocks: Relief from credit jitters plus high odds of an October cut keep risk supported; direction into month-end hinges on Friday’s CPI and any QT signals.

Week-ahead triggers

• Wed Oct 22: UK CPI. A downside miss pressures GBP and supports Gilts.

• Thu Oct 23: Flash PMIs for Eurozone, UK, Australia, Japan. Growth tone for EUR and risk FX.

• Fri Oct 24: U.S. CPI rescheduled to 08:30 ET, consensus near 3.1 percent YoY.

• Tue Oct 29: FOMC, markets price an almost certain 25 bp cut; QT guidance watched.