Forex News
- EUR/USD falls 0.60% on Monday, pressured by persistent US Dollar strength.
- US services activity remained firmly in expansion territory despite losing some momentum in September.
- Political turmoil and concerns over Europe’s public finances add pressure on the Euro.
EUR/USD falls 0.60% on Monday and trades around 1.1190 at the time of writing. The pair remains under pressure as the US Dollar (USD) maintains positive momentum, supported in part by elevated US Treasury yields, while political and fiscal concerns in Europe weigh on the Euro (EUR).
The latest business activity data released on Monday confirmed the resilience of the US economy. The final S&P Global Services Purchasing Managers Index (PMI) was revised slightly higher to 58.8 in September from the preliminary estimate of 58.7. Meanwhile, the Institute for Supply Management (ISM) Services PMI eased to 54.9 in September from 55.4 in August, slightly below the market consensus of 55. However, the indicator remains comfortably above the 50 threshold separating expansion from contraction.
The figures come after last week’s weaker-than-expected US employment report. According to the CME FedWatch tool, markets now assign only around a 20% chance that the Federal Reserve (Fed) will raise interest rates at its October meeting, down from nearly 70% a week earlier. Persistent inflation risks, however, prevent investors from completely ruling out further monetary tightening later this year. Stronger price pressures in the services sector and energy-related inflation complicate the Fed’s efforts to bring inflation sustainably back toward its 2% target.
Against this backdrop, US Treasury yields remain close to multi-year highs, supporting the Greenback. The benchmark 10-year US Treasury yield holds around 5.30%, not far from last week’s peak of 5.34%, its highest level since 2002. However, the rise in US yields also reflects growing concerns over the US debt burden and broader fiscal position. These concerns could limit the US Dollar’s ability to extend its appreciation over a prolonged period.
On the European side, the Euro remains undermined by mounting political and fiscal uncertainty. Concerns are particularly focused on France, where high debt levels, a widening budget deficit and doubts over the government’s ability to pass its 2027 budget are fueling tensions in the bond market. Political uncertainty is also spreading to Spain, where Prime Minister Pedro Sánchez has called a snap election amid growing protests over the housing crisis.
Eurozone economic data nevertheless provide some encouraging signals. The HCOB Eurozone Composite PMI rose to 53.1 in September from 52 previously, while the Services PMI climbed to 53.0 from 51.6, confirming an acceleration in private-sector activity.
The improvement in European economic indicators is not enough to support the Euro against a US Dollar benefiting from elevated yields and an economy that continues to show resilient activity. This divergence keeps EUR/USD under pressure on Monday.
EUR/USD technical analysis
In the one-hour chart, EUR/USD trades around 1.1191, keeping a bearish near-term tone as it holds below the 100-period simple moving average (SMA) at 1.1284 and the 200-period SMA at 1.1332. The pair has slipped under a series of marked horizontal barriers, with momentum subdued as the 14-period Relative Strength Index (RSI) hovers near 38, which hints at persistent downside pressure rather than an oversold washout.
On the topside, initial resistance emerges at 1.1215, followed by 1.1270 ahead of a denser cap formed by the 100-period SMA at 1.1284 and the horizontal level at 1.1312, before the 200-period SMA at 1.1332. On the downside, the first notable support aligns at 1.1161, and a sustained break beneath this floor would likely open the path to further bearish extension in the short term.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Brown Brothers Harriman’s Elias Haddad notes the Dollar rallied broadly last week as DXY hit new cyclical highs alongside widening US-G6 rate differentials and a deepening global bond selloff. Softer September NFP reduced odds of an October Fed hike, but BBH argues US growth outperformance and foreign demand for US securities keep USD risks skewed higher despite policy headwinds.
USD rally faces mixed policy signals
"USD rallied against all major currencies last week, with the DXY index making new cyclical highs in line with widening US-G6 interest rate differentials. In parallel, the global bond market selloff deepened, driven by a tighter expected policy path, crowding-out effects due to the increasing bond issuance of large tech firms and concerns over sovereign debt sustainability."
"Friday’s soft September nonfarm payrolls (NFP) took some steam out of the USD rally, by reducing odds of a back-to-back Fed funds rate hike in October. Still, the report remains consistent with a stable labor market and does not challenge the Fed’s tightening bias. That’s why the relief rally in Treasuries proved short-lived."
"Tighter policy elsewhere and a growing case for an October Fed pause are USD headwinds. But US growth outperformance and strong foreign appetite for US securities keep USD risks skewed to the upside."
"The September FOMC minutes (Wednesday) are likely to look somewhat dated after recent calls for patience from key Fed officials (Williams, Jefferson, and Bowman). Recall, the FOMC’s September hike came with a clear hawkish tilt and unanimous backing."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- USD/CHF edges higher as broad US Dollar strength outweighs softer Fed rate-hike expectations.
- A sharp decline in the Euro helps the US Dollar climb to a fresh year-to-date high.
- Safe-haven demand cushions the Swiss Franc, although low interest rates remain a headwind.
USD/CHF edges higher on Monday, snapping a two-day losing streak as the US Dollar (USD) climbs to a fresh year-to-date high. A sharp decline in the Euro (EUR) lifts the Greenback, even as traders scale back expectations of another Federal Reserve (Fed) interest-rate hike in October following softer-than-expected US employment data. At the time of writing, USD/CHF trades around 0.8316, below last week’s peak of 0.8382, its highest level since May 2025.
The Euro remains under heavy selling pressure as concerns over France’s public finances and political gridlock spread across European markets. EUR/USD trades around 1.1189 after falling to 1.1161 earlier in the day, its lowest level in over a year. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, holds near 102.32 after touching 102.53.
Fresh business activity data released on Monday showed that the US economy remains resilient. The final S&P Global Services Purchasing Managers’ Index (PMI) was revised slightly higher to 58.8 in September from the preliminary reading of 58.7. The ISM Services PMI eased to 54.9 from 55.4, slightly below the market forecast of 55. Both surveys remain comfortably above the 50 mark separating expansion from contraction.
The figures follow last week’s weaker-than-expected US Nonfarm Payrolls (NFP) report. According to the CME FedWatch Tool, traders now price in only around a 20% chance that the US central bank will raise interest rates at its October 27-28 meeting, down from nearly 70% a week ago.
However, persistent inflation risks keep expectations of a rate hike later this year alive as policymakers remain committed to bringing inflation back towards the central bank’s 2% target. Oil-related price pressures also complicate the Fed’s task of returning inflation sustainably to target. As a result, US Treasury yields remain elevated near multi-year highs, lending additional support to the Greenback. The benchmark 10-year yield holds near 5.30%, just below last week’s peak of 5.34%, its highest level since 2002.
Still, the rise in US Treasury yields is not solely driven by the Fed outlook. It also reflects growing investor concerns over the country’s debt burden and broader fiscal position, which could limit the Greenback’s gains.
Fiscal concerns in both the United States and Europe increase the Swiss Franc’s (CHF) appeal as a safe-haven currency, supported by Switzerland’s stronger fiscal position and lower debt burden. However, Switzerland’s wide interest-rate gap with other major economies, along with the Swiss National Bank’s (SNB) readiness to intervene in the currency market, remains a headwind for the Franc.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
- The US ISM Services PMI missed consensus in September.
- The US Dollar keeps its rally well in place.
Fresh data from the Institute for Supply Management (ISM) showed the Services PMI weakening to 54.9 in September from 55.4 in the previous month, coming in below previous estimates (55) and signalling a slight loss of momentum in the sector.
Inflation pressures gathered traction, with the Prices Paid Index edging higher to 74 from 72.6. Hiring conditions improved marginally, with the Employment Index ticking higher to 50.1 from 47.8. Meanwhile, new business lost some impulse, with the New Orders Index dropping to 59.8 from 60.9.
Market reaction
The Greenback remains well bid on Monday, motivating the US Dollar Index (DXY) to hit fresh tops near 102.60 in quite an auspicious start to the week.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.57% | 0.31% | 0.16% | 0.05% | -0.15% | 0.59% | 0.36% | |
| EUR | -0.57% | -0.23% | -0.39% | -0.51% | -0.55% | -0.06% | -0.17% | |
| GBP | -0.31% | 0.23% | -0.17% | -0.26% | -0.32% | 0.16% | 0.06% | |
| JPY | -0.16% | 0.39% | 0.17% | -0.12% | -0.22% | 0.33% | 0.22% | |
| CAD | -0.05% | 0.51% | 0.26% | 0.12% | -0.09% | 0.43% | 0.31% | |
| AUD | 0.15% | 0.55% | 0.32% | 0.22% | 0.09% | 0.50% | 0.38% | |
| NZD | -0.59% | 0.06% | -0.16% | -0.33% | -0.43% | -0.50% | -0.12% | |
| CHF | -0.36% | 0.17% | -0.06% | -0.22% | -0.31% | -0.38% | 0.12% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
This section below was published as a preview of the US ISM Services PMI at 1230:00 GMT.
- The US ISM Services PMI is expected to show the sector’s resilience in September.
- The US services sector is expected to remain well into expansionary territory.
- Bets of further Fed tightening appear to have lost traction in the last few days.
On Monday, we’ll get the latest read on the US services sector when the Institute for Supply Management (ISM) publishes its September gauge. Consensus points to a marginal downtick to 55 from August’s 55.4. If confirmed, the reading is unlikely to significantly dent the current sector’s resilience and confidence in the broader economy.
Back in August, the details from that release were mixed: hiring momentum picked up pace, with the ISM Employment Index climbing a tad to 47.8 (from 47.4). In the same line, New Orders gathered decent steam, increasing to 60.9, which hinted that demand may be picking up pace. In tandem with the steady growth, the Prices Paid Index rose to 72.6, echoing the strengthening momentum of inflation pressures.
What to expect from the ISM Services PMI report?
Inflation in the US is still running hotter than the Federal Reserve’s (Fed) 2% target, and that keeps policymakers uneasy, especially amid the still unresolved crisis in the Middle East and with the full effects of US tariffs yet to filter through the economy.
The inflationary pressure in the US appears to have lost some traction in August, following the latest data from the Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE). However, Fed officials and Chair Kevin Warsh have been cautious in their latest comments, keeping the issue of (still elevated) inflation on the table and the main source of the recent increase in speculation surrounding extra rate hikes in the second half of the year.
Against that backdrop, an ISM Services PMI that lands in line with expectations probably won’t move the US Dollar (USD) much. It would simply confirm the picture of an economy that’s still resilient but still wrestling with sticky price pressures. A softer-than-expected print, though, could shake confidence and see investors probably trimming their USD holdings on fears that growth is losing momentum.
When will the ISM Services Purchasing Managers Index report be released, and how could it affect EUR/USD?
The Institute for Supply Management (ISM) will publish the Services Purchasing Managers Index (PMI) on Monday at 14:00 GMT.
Pablo Piovano, Senior Analyst at FXStreet, explains that the near-term outlook for EUR/USD has markedly deteriorated since the beginning of September, coincidentally with a break below its critical 200-day SMA.
Against that, Piovano argues that with spot trading near the 1.1200 yardstick, the continuation of the bearish trend should meet the next support at the May 2025 floor at 1.1064 (May 21). Further south comes the psychological 1.1000 contention zone prior to the weekly trough at 1.0732 (March 27, 2025).
On the flip side, “If the pair manages to reclaim the 1.1515-1.1520 zone, where both the provisional 55-day and 100-day SMAs sit, the next target is expected to emerge at the more relevant 200-day SMA around 1.1610," Piovano adds.
“Momentum indicators also suggest that further pullbacks are likely for now, although a technical bounce cannot be ruled out given that the Relative Strength Index (RSI) is around 17, while the Average Directional Index (ADX) near 40 indicates that the current trend remains robust," he concludes.
Economic Indicator
ISM Services PMI
The Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US services sector, which makes up most of the economy. The indicator is obtained from a survey of supply executives across the US based on information they have collected within their respective organizations. Survey responses reflect the change, if any, in the current month compared to the previous month. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the US Dollar (USD). A reading below 50 signals that services sector activity is generally declining, which is seen as bearish for USD.
Read more.Next release: Mon Oct 05, 2026 14:00
Frequency: Monthly
Consensus: 55.7
Previous: 55.4
Source: Institute for Supply Management
The Institute for Supply Management’s (ISM) Services Purchasing Managers Index (PMI) reveals the current conditions in the US service sector, which has historically been a large GDP contributor. A print above 50 shows expansion in the service sector’s economic activity. Stronger-than-expected readings usually help the USD gather strength against its rivals. In addition to the headline PMI, the Employment Index and the Prices Paid Index numbers are also watched closely by investors as they provide useful insights regarding the state of the labour market and inflation.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
Societe Generale strategists highlight renewed Euro (EUR) weakness as widening European spreads and US Dollar (USD) demand push EUR/USD below 1.12, far from the European Central Bank's (ECB) technical assumption of 1.16 for 2026-28. They stress that currency depreciation complicates the inflation outlook and could trigger ECB debate on uneven policy transmission, with speculative positioning now short Euro futures.
Debt spreads and Dollar demand pressure
"Fear of contagion across European debt markets drove the euro lower across the board on Friday and it’s a similar picture that emerges this morning, with rising yields and the tightening in the XCCY spread (dollar demand) driving EUR/USD below 1.12 to the lowest levels since May 2025."
"The depreciation of the currency will only complicate the inflation landscape for the ECB and the widening in spreads could become a headache, prompting debate about uneven transmission of monetary policy and the non-standard tools to narrow the divergence."
"The currency is deviating further away from the technical assumption of 1.16 for 2026-28 and implies higher inflation all else being equal on growth and energy prices."
"How long before ECB speakers publicly come out in support of the single currency and try to slow the pace of decline?"
"With oil and natural gas prices staying elevated, the pass through of the currency will squeeze industrial companies and erode real disposable income for households."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- NZD/USD falls 0.70% on Monday and trades near its lowest level since November 2025.
- Renewed risk aversion and geopolitical tensions revive demand for the US Dollar.
- Expectations of higher interest rates in New Zealand struggle to support the Kiwi against a stronger Greenback.
NZD/USD extends its decline on Monday and trades around 0.5582 at the time of writing, down 0.70% on the day. The pair is flirting with the November 2025 low at 0.5580 after posting six consecutive weeks of losses. NZD/USD is therefore trading close to an important area between 0.5580 and 0.5470. This region has triggered several notable rebounds since 2020, increasing the focus on the pair's behavior around current levels.
The New Zealand Dollar (NZD) remains under pressure amid renewed demand for the US Dollar (USD), as caution dominates financial markets. Turmoil in global bond markets and persistent geopolitical risks favor safe-haven assets, allowing the Greenback to regain momentum despite recently disappointing US economic data.
Geopolitical concerns remain particularly elevated. The head of Yemen's Presidential Leadership Council, Rashad al-Alimi, announced the start of military operations aimed at retaking territories still controlled by the Houthis. Meanwhile, Iranian Parliament Speaker Mohammad Bagher Ghalibaf said that the Strait of Hormuz would remain closed until Tehran's conditions are met. Fresh Russian strikes on Ukraine also keep uncertainty elevated and support demand for safe-haven assets.
This risk-averse environment is particularly negative for the New Zealand Dollar, which is traditionally sensitive to shifts in investor sentiment. Turmoil in global bond markets adds to the pressure, as elevated energy prices fuel concerns about persistent inflation and deteriorating public finances across several major economies.
The US Dollar rebound comes despite a less supportive US monetary policy backdrop. Recent inflation and employment data have reduced expectations of another interest rate hike as soon as October by the Federal Reserve (Fed), pushing US Treasury yields lower from their recent highs. Nevertheless, investors continue to see the possibility of another increase in borrowing costs before the end of the year, helping to limit downside pressure on the Greenback.
Investors now turn their attention to the release of the US Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI) on Monday. The consensus expects the index to ease to 55 in September from 55.4 in August. The final S&P Global Services PMI will also attract attention after the preliminary estimate rose to 58.7, its highest level in more than five years.
On the New Zealand side, expectations of further monetary tightening have so far failed to halt the Kiwi's decline. Markets anticipate an increase in the Official Cash Rate (OCR) by the Reserve Bank of New Zealand (RBNZ) at its October 28 meeting. This prospect could nevertheless provide some support to the New Zealand Dollar if expectations for higher interest rates continue to strengthen.
NZD/USD technical analysis
In the daily chart, NZD/USD trades around 0.5583, extending its decline and retaining a bearish near-term bias as spot holds well below the 100-day simple moving average (SMA) at 0.5806 and the 200-day SMA at 0.5846. The pair is pressing a minor horizontal floor at 0.5580, while the Relative Strength Index (14) near 24 signals oversold conditions that could slow the downside rather than reverse the broader weakening trend for now.
On the topside, initial resistance appears at 0.5626, followed by tighter caps at 0.5649 and 0.5686, ahead of a more significant barrier at 0.5735 and the higher trend references at the 100-day SMA at 0.5806 and 200-day SMA at 0.5846. On the downside, a clean break under the immediate support at 0.5580 would expose the next bearish target at 0.5540, where buyers may try to stabilize the pair after the latest oversold slide.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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