Market Rumors
The economic agenda is far from overloaded. And for a good reason, the American shutdown continues! The Trump administration does not seem at all willing to find concessions with the Democrats on the thorny issue of planned spending cuts in healthcare. During this period, which is quite common in American politics, government statistics are not published (for example, employment and inflation figures). Only private statistics, which are often fragmentary or even unreliable, remain. Last week, the confidence index for American small businesses – a publication by the NFIB which usually goes unnoticed – was closely monitored. In September, the index fell back to its June levels. Nothing dramatic at this stage. The American economy still seems healthy, evolving slightly below its growth potential estimated between 2% and 2.5%. An additional boost from the American Federal Reserve (Fed) is still welcome at the end of the month.
The macro point
Jean who laughs, Jean who cries. While the euro is subject to profit-taking, the US dollar is capitalizing on a technical rebound and the positive effect of the shutdown. Another piece of good news is that the short positions and long positions held by speculators are now balanced. Gone are the massive dollar sales of recent months! Does this mean that the rise of the EUR/USD is over? It's far from certain.Another notable event of recent days is the US-China trade war resuming with renewed intensity, focusing on rare earths. As always, the market buzzes with rumors about a possible devaluation of the Chinese yuan, which still hasn’t happened. If it were to occur, the collateral damage could be significant: increased bond yields in the US market – movements similar in scale to those observed in April following 'Liberation Day', pressure on the debt of heavily indebted countries, and destabilization of the most fragile emerging currencies (Argentine peso, Turkish lira, etc.). The good news is that we doubt this is a credible risk. Since 2018, it's been consistently mentioned without any follow-through. Why? China can marginally adjust the yuan’s exchange rate. However, a devaluation is drastic and risks causing a capital flight that would have very long-term negative effects. It's not even certain that a devaluation would be that beneficial for boosting exports – recent studies show that the Chinese industry is increasingly less dependent on price competitiveness. As expected, it has moved up the value chain!
On the side of emerging currencies, the Argentine peso stands as the big loser of the year. Despite support from the US Treasury, the economic and financial crisis lingers. To support the peso, the central bank has already exhausted $1.1 billion of reserves in September. In parallel, the Argentine government is also intervening. For instance, in a single day, it sold $320 million. All this has had a very marginal positive effect on the peso, demonstrating how severe the crisis of confidence is. There is also suspicion that vulture funds are at play, currently betting on a country default – which naturally complicates matters. Fortunately, there may be light at the end of the tunnel. The October 26 elections, where 50% of Congress seats are at stake, might lead to a regime change, potentially reducing pressure on the peso and other Argentine assets. However, nothing is certain. The moral of the story: escaping decades of crisis and sustainably regaining foreign investor confidence, even when supported by Uncle Sam, is not an easy task.
Technical point
Tough times for the euro. Profit-taking for several weeks, technical rebound of the Dollar Index, and the end of hopes for a European economic revival (the German stimulus plan presented at the beginning of the year is slow to have a wow effect on growth). All this pushes the EUR/USD down: -1.13% in a month. But as long as the support at 1.15 is not broken, the trend is upward in the long term. However, it will certainly be more challenging to quickly reconnect with the technical threshold at 1.20 than initially anticipated.
When the euro cries, the dollar smiles. It always happens that way. It has been confirmed once again. It seems that the shutdown has been rather beneficial for the greenback. Another good piece of news, the latest weekly Commitment of Traders report from the American regulator, the CFTC, shows that short and long positions held by institutions on the American dollar are almost balanced. There are no longer any massive sales, as was the case in recent months.
The supports and resistances displayed below indicate respectively the low and high points within which the rates should evolve during the week. | Weekly Supports | | Weekly Resistances | |
|---|
| S2 | S1 | R1 | R2 |
| EUR/USD | 1.1559 | 1.1500 | 1.1744 | 1.1829 |
| EUR/GBP | 0.8513 | 0.8580 | 0.8700 | 0.8790 |
| EUR/CHF | 0.9240 | 0.9288 | 0.9391 | 0.9411 |
| EUR/CAD | 1.6149 | 1.6211 | 1.6388 | 1.6413 |
| EUR/JPY | 173.12 | 173.90 | 176.90 | 177.22 |
Announcements to follow
The impact of the American shutdown is still perceptible on economic publications. It will take a while before having the first estimate of American inflation in October – a usually crucial source of information for the Fed. Only the inflation for September is scheduled this week. It's too late for it to influence the short-term interest rate direction.
In the absence of many American statistics at hand, traders could pay more attention to the publication of the American PMI this Friday, which is expected to be in expansion territory – a sign that the economy is still resilient. This is not the case for France. Unless there is a surprise, activity in the manufacturing and services sector is expected to be in contraction in October, as was the case the previous month. This is directly the effect of political instability.
Below are the publications and events that are expected to have a major impact on the evolution of currency rates.| Day | Time | Country | Indicator | What to Expect? |
|---|
| 10/24/2025 | 09:15 | FRA | Manufacturing and Services PMI (October) | First estimate. They were in contraction in September – sign of a struggling economy. |
| 10/24/2025 | 14:30 | USA | Inflation (September) | Late publication due to the American shutdown. |
| 10/24/2025 | 15:45 | USA | Manufacturing and Services PMI (October) | First estimate. In expansion in September. |
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