Daily Market Report
10/07/2026
EUR/USD ranged in the high 1.11’s to mid 1.12’s overnight. The Euro (EUR) heads south against the US Dollar (USD) on Wednesday, giving away Tuesday’s gains weighed by rising Oil prices and broad-based US Dollar strength ahead of the release of the minutes of the last Federal Reserve (Fed) meeting. The EUR/USD pair is trading at session lows in the area of 1.1225, down from Tuesday’s highs at 1,1275, and unfazed by the strong German Industrial Production release.
The Euro found some relief on Tuesday as the far-right Marine Le Pen, the best-positioned candidate to win next year’s presidential elections, announced a plan to cut spending. Le Pen vowed to save costs by EUR 140 billion in the next five years, and bring the fiscal deficit to levels below 3% by 2030 from the current 5.1%. The plan thrilled investors. French government bond yields retreated from multi-decade highs and the EUR/USD bounced to the upper range of the 1.1200s from 17-month lows, near 1.1160 on Monday.
The US Dollar, on the other hand, is regaining lost ground against its most peers on Wednesday, as investors brace for the release of the minutes of September’s Federal Open Market Committee (FOMC) meeting due later in the day. The Fed hiked rates by 25 basis points for the first time in three years and hinted at further tightening ahead.
The GBP/USD pair weakens further below mid-1.3200s during the first half of the European session on Wednesday, eroding a major part of the previous day’s move higher amid a broadly firmer US Dollar (USD). Spot prices, however, remain confined in a familiar range held over the past two weeks or so as traders keenly await the release of FOMC Minutes before placing fresh directional bets.
Strategists note that their expectation for GBP/USD to “range-trade between 1.3195 and 1.3245” proved incorrect after the Pound “rose to a high of 1.3286.” They acknowledge that “upward momentum has increased, albeit not significantly,” and now judge that “today, there is a chance for GBP to retest 1.3285.” However, they add that “a continued rise above this level is unlikely,” with the “major resistance at 1.3315” also “unlikely to come under threat.” On the downside, strategists highlights “support is at 1.3240, followed by 1.3220.”
The Japanese Yen (JPY) holds marginal gains against the US Dollar (USD) on Wednesday. The USD/JPY pair has pulled back to levels near 158.00 from two-week highs at 158.51 following hawkish comments by Bank of Japan (BoJ) board member Ayano Sato, although the overall US Dollar strength and higher Oil prices are keeping Yen rallies limited so far.
The Japanese Yen appreciated after the comments, but the impact on the USD/JPY pair has been moderate so far. The Greenback maintains its firm tone, with investors wary of selling the Greenback ahead of the release of the latest Federal Reserve (Fed) monetary policy meeting and with rising Oil prices weighing on oil-importing countries, such as Japan.
Source: FX Street