Daily Market Report
10/06/2026
EUR/USD ranged in the low to mid 1.12’s overnight. The Euro (EUR) keeps heading lower against a firmer US Dollar (USD) on Tuesday, as growing political uncertainty and a deteriorating fiscal outlook have renewed fears of debt contagion in the region. German Factory Orders have failed to provide significant support, pushing the EURUSD pair toward the 1.1200 level after a mild recovery attempt, which it was capped just below 1.1230 earlier in the day.
Report highlight the decline in sales of transport equipment, such as aircraft, ships, trains and military vehicles, which fell 61% on seasonally adjusted terms after having doubled in July, as the main reason for August’s figures. Excluding large-scale orders, sales of all other items declined a mere 0.1%.
The Euro remains under pressure amid rising concerns about public finances, with the gap between France’s OAT yield and the German Bund at levels unseen since the 2009 financial crisis. France is also facing a political gridlock that discards any significant savings plan, at least until the presidential elections in 2027, and to make things worse, Spanish President Pedro Sanchez announced a snap election in November. If we add to this the fragility of Frederich Merz’s cabinet in Germany, we obtain the picture of the uncertain political scenario that keeps investors away from the Euro.
The GBP/USD pair attracts some dip-buyers near the 1.3200 mark on Tuesday and hits a fresh daily high during the first half of the European session. Spot prices, however, remain confined in a familiar range held over the past two weeks or so and currently trade around the 1.3240 region, up less than 0.10% for the day.
The US Dollar (USD) edges lower as bulls opt to take some profits off the table following the recent strong rally to the highest level since April 2025, offering some support to the GBP/USD pair. Furthermore, traders have been pricing in tighter monetary policy from the Bank of England (BoE) amid sticky inflation due to elevated energy prices, which further underpins the British Pound (GBP) and contributes to the intraday move up.
The downside for the USD, however, seems cushioned amid persistent geopolitical uncertainties stemming from the ongoing conflicts in the Middle East. Moreover, traders are still pricing in over an 85% chance that the US Federal Reserve (Fed) will raise borrowing costs again by the year-end. This, along with elevated US bond yields, backs the case for the emergence of some USD dip-buying and should keep a lid on the GBP/USD pair.
The USD/JPY pair attracts some buyers following the previous day’s two-day price moves, trading above the 158.00 mark during the early part of the European session on Tuesday. Spot prices await a breakout through the top boundary of a nearly one-week-old range before the next leg up amid the underlying strong bullish sentiment surrounding the US Dollar (USD).
Traders are still pricing in over an 85% chance that the US central bank will raise borrowing costs by the end of this year. Moreover, persistent geopolitical uncertainties stemming from the ongoing conflicts in the Middle East and elevated US bond yields underpin the safe-haven buck. The Japanese Yen (JPY), on the other hand, is undermined by diminishing odds for more aggressive tightening by the Bank of Japan (BoJ). In fact, three sources familiar with the central bank’s thinking said that some BoJ policymakers remain cautious about another interest rate hike later this month.
Source: FX Street