Daily Market Report

10/09/2026

EUR/USD ranged in the high 1.11’s to the low 1.12’s overnight. The EUR/USD pair attracts buyers for the second straight day, rising to the 1.1225-1.1230 area during the Asian session on Friday amid a weak US Dollar (USD). Spot prices, however, remain confined within a range held since the beginning of this month, warranting some caution for bulls.

Concerns about France’s deepening debt levels and political gridlock ahead of next year’s election might hold back traders from placing aggressive bullish bets on the shared currency. This, along with a bearish technical setup, suggests that strong follow-through buying is needed to confirm that the EUR/USD pair has formed a near-term bottom and is positioned for an extension of this week’s modest recovery from the 1.1160 region, or the lowest level since May 2025.

The GBP/USD pair gathers strength to around 1.3240 during the early Asian trading hours on Friday. The US Dollar (USD) softens against the British Pound (GBP) following comments from Federal Reserve (Fed) Governor Christopher Waller. Traders will keep an eye on the Michigan Consumer Sentiment Index data for October later on Friday.

Fed Governor Christopher Waller said on Thursday that additional rate hikes will likely be needed to lower inflation to the Fed’s 2% target, but added there was “flexibility” about ‌the pace of increases and left the door open for a pause at the upcoming October meeting.

Markets are now pricing in nearly a 17.7% chance that the US central bank will lift the interest rate at least 25 basis points (bps) at the policy meeting later this month, down from 38% a week ago, the CME FedWatch tool showed. Markets are pricing in an 83% chance of a hike at the Fed’s December meeting.

However, UK fiscal concerns could weigh on the Cable in the near term. After the UK’s long-term borrowing costs reached their highest level since the 1990s last week, the focus remains firmly on Finance Minister John Healey’s first budget on October 28.

The US Dollar (USD) ticks up against the Japanese Yen (JPY) on Friday but remains trapped in a tight range, with downside attempts contained above the 157.50 area and the 200-day SMA at 158.54, which holds bulls for now. Soft Japanese household spending data has failed to support the Yen, but the US Dollar is showing some weakness against most of its peers as US Treasury yields pulled back from multi-decade highs.

Data from the Japanese Ministry of Economy, Trade and Industry revealed that Household Spending dropped 3.1% year-over-year in August. The decline is softer than the 3.6% expected by the market, but it marks the eighth consecutive contraction, which confirms that the country’s domestic demand keeps weakening.

The Yen, however, received some support from comments by Bank of Japan’s (BoJ) new committee member, Ayano Sato, supporting gradual monetary tightening earlier this week. Sato is one of the two members who voted against September’s rate hike, and these comments clear the way for a steeper tightening cycle by the Japanese Central bank.

Source: FX Street