Exchange Rates: Euro Under Pressure Against the Dollar as Central Banks Pause


Economic Situation

Taux de change : l’euro sous pression face au dollar, les banques centrales temporisent - Depositphotos.com, Auteur pedro2009

PONANT


The U.S. Federal Reserve (the Fed) and the European Central Bank (the ECB) are expected to move on the same dates: nothing at the end of October, followed by a rise in their interest rates in December.

Since this scenario is already priced in, it will no longer differentiate the two currencies before January, unless a surprise, and it could come from the September U.S. inflation, published on Wednesday. In the background, energy prices remain the real risk.

American expectations moved quickly. Barely had the U.S. rate been set in the 3.75% to 4.00% range, investors priced in, by nearly 75% on September 29, a further increase on October 28. They now believe it with less than 20% probability. John Williams, one of the Fed’s leaders, ruled out any rush, and the country created only 29,000 jobs in September. The move is deferred, not canceled: by the December meeting, the probability of a hike is judged likely at 84%.

The ECB should follow the same path. Reuters polled 73 economists on October 8: 70 see it keeping its rate at 2.50% on October 29, and 64 expect it to raise in December. Again, the scenario is known, thus already priced in. Only a revision would move the markets: some capital would then flow toward the currency with the fastest rising yields.

The euro has fallen for five weeks in a row, the latest week a soft one, and it was worth 1.1210 dollars this morning. The risk, in our view, remains oil. Europe buys it abroad and settles in dollars, while the United States sells more than it consumes: a price spike weighs only on the former.

Or Riyadh was attacked this weekend, and tankers were targeted near the Strait of Hormuz, which keeps the pressure. Winter budgets are therefore built on fuel that remains expensive and on dollar-denominated services that will not become cheap again.



Exchange Rates: The Technical View

Bearish bets against the euro remained buoyant last week : short positions held by speculators weighed 99,300 contracts as of Tuesday, October 6, up 36,000 over seven days.

A U.S. inflation figure weaker than expected would force them to buy back euros. In our view, such purchases would push the European currency toward 1.13 dollars quickly, while a fall toward 1.11 would occur more slowly.

The U.S., Canadian and Japanese debt markets are closed this Monday: there are therefore few buyers and sellers. Oil, however, reacted to the news. Brent opened at $105.48, before retreating toward $103.90 when the United States hinted that Russian diesel could circulate. Currencies remained almost unmoved: 1.5977 Canadian dollars per euro this morning, 177.27 yen, the pound at 0.8463 and the Swiss franc at 0.9299. These levels will only be taken for granted after Tuesday’s session.

Thailand, meanwhile, is quietly firming ahead of winter. The baht has strengthened for a month: it took 38.31 bahts to buy one euro on September 9, versus 37.57 at the ECB reference rate on October 9, i.e., 1.9% less. A transaction priced by a Bangkok or Phuket intermediary at the back-to-school rate thus sees its margin shrink.


WEEKLY SUPPORTS WEEKLY RESISTANCES
S2 S1 R1 R2
EUR/USD 1.0986 1.1098 1.1322 1.1434
EUR/GBP 0.8294 0.8378 0.8548 0.8632
EUR/CHF 0.9113 0.9206 0.9392 0.9485
EUR/CAD 1.5657 1.5817 1.6137 1.6297
EUR/JPY 173.72 175.50 179.04 180.82


The supports and resistances shown below indicate respectively the lower and upper points within which prices are expected to move during the week.



The information presented in this publication is provided for informational purposes only and does not constitute investment advice, an offer to sell, or a solicitation to buy, and should in no case be used as a basis or be considered as an incentive to engage in any investment.


Mondial Change is a French financial institution, founded in 2015, specializing in the management of international payments and exchange rate risk.

Mondial Change supports many players in tourism, travel agencies, group organizers, tour operators, incoming operators…

www.mondialchange.com

Contact : [email protected]


Currency Exchange Rates: Dollar Falls, Euro Remains Uncertain [ABO]


Economic Situation

Taux de change : le dollar recule, l’euro sous pression - Depositphotos.com Auteur fotoscool

PONANT


Prices rose by 3.7% in a year in the United States in September, after 3.4% in August, and the American currency nevertheless lost ground. The reference rate published by the European Central Bank set one euro at 1.1253 dollars on Friday, i.e. 0.42% higher than seven days earlier. Dollar-denominated services, including North American hotels and cruises, have therefore eased slightly.

This acceleration is almost entirely due to gasoline, whose price jumped by 9.1% in a month: by itself it explains more than half of the rise. Excluding energy and food, the year-over-year increase stands at 2.6%. The U.S. Federal Reserve, the Fed, can therefore wait before another rate hike, allowing time to ensure that expensive fuel does not push up other prices.

Investors reassessed this in three days. On Wednesday, they were still assigning roughly a 50% chance of a rate increase on October 28. Several Fed officials then judged there was no urgency, and Kevin Warsh, who leads the institution, did not want to reveal the decision in advance on Friday. The probability fell back to around 15%, and lower expected rates make the dollar less attractive.

The American stock market did the rest. Technology stocks fell 4.5% in a week and distrust spread to the bonds financing data centers. Investors sought refuge in U.S. government debt, not in the country’s currency.

Crude oil rose 4.9%: Europe, which buys its energy abroad, loses on this, but expensive energy makes a December European rate hike more likely, supporting the euro. The dollar, in our view, can still weaken if this American credit malaise persists; it would rise if it spread worldwide.



Exchange Rates: The Technical Update

The euro is losing ground this Monday morning against each of the currencies we track, likely due to the violence that erupted during the French demonstrations.

It trades at 0.9253 Swiss francs, 0.8421 pounds, 1.1225 dollars and 1.5847 Canadian dollars. In addition, 177.47 yen are required to buy one euro. Last week, the euro had already fallen 0.45% against the pound and 0.44% against the franc: it is not strong, it is the dollar that has weakened.

We anticipate the European currency moving from 1.1105 to 1.1350 dollars by Friday. The lower bound assumes France borrows more expensively before Moody’s rating review, while the upper bound assumes the American credit strain worsens without spreading to other countries. Four central banks are due to speak next week, and inactivity dominates: a US hold is deemed likely at 84% by markets, and among 73 economists surveyed by Reuters, 70 expect no change on the European side. It is therefore better to stagger dollar purchases rather than committing everything before these meetings.

South Africa, entering its peak season, leaves little room for European buyers. The rand stood around 16.44 per dollar on Friday, up 0.3% for the day, supported by gold and platinum prices, the country’s two main exports. The dollar, for its part, recorded its first weekly decline in five weeks. It now takes about 18.5 rands to buy one euro, slightly less than at the start of September. A safari or a Cape Town circuit priced in rands yields no additional margin on departures already sold.


WEEKLY SUPPORTS WEEKLY RESISTANCES
S2 S1 R1 R2
EUR/USD 1,1105 1,1150 1,1270 1,1350
EUR/GBP 0,8340 0,8385 0,8460 0,8505
EUR/CHF 0,9170 0,9210 0,9300 0,9340
EUR/CAD 1,5730 1,5780 1,5945 1,6020
EUR/JPY 175,70 176,60 178,40 179,30


The supports and resistances shown below indicate, respectively, the low and high points within which prices are expected to move during the week.



The information presented in this publication is provided purely for informational purposes and does not constitute investment advice, nor a sales offer, nor a purchase solicitation, and should in no case be used as a basis or be considered as an incentive to engage in any investment.


Mondial Change is a French financial institution, founded in 2015, specializing in the management of international payments and exchange risk.

Mondial Change also supports numerous tourism sector players, travel agencies, group organizers, tour operators, and incoming operators…

www.mondialchange.com

Contact : [email protected]


Currencies: Euro Slump Weighs on Travel [ABO]


Economic Situation

L'euro est tombé ce lundi sous 1,12 dollar, au plus bas depuis mai 2025 - Depositphotos.com, HandmadePicture

Aer Lingus


All major currencies gained ground against the euro last week, and the euro itself slipped this Monday below 1.12 dollars, its lowest level since May 2025.

A strong dollar alone would not account for such a broad decline: the weakness originates from the eurozone itself.

Europe buys almost all of its energy abroad and settles those purchases in dollars. Each uptick in prices forces it to acquire more American currency, which in turn weakens the euro and fuels European inflation, at 3.8%.

High energy costs and a weak euro stem from the same root, and both add to the price tag of services purchased outside the euro area.

There are also two immediate reasons. First: the European Central Bank does not want to rush its tightening. It has raised its rate twice since June, but Christine Lagarde advocates for a “measured response,” as credit already becomes more expensive even before high energy translates into higher wages. Investors hardly expect another rate increase this month: the probability dropped from 60% to 18% for October, versus 73% for December.

The second: France’s debt. The spread between France and Germany on ten-year borrowing widened by 0.34 point over five sessions, to nearly 1.41 points on Friday, and the budget will only be examined by Parliament starting October 13.

The tension remains, in our view, and also according to State Street, a French affair.

Three escape hatches remain open for the euro: cheaper energy, a calmer French debt, or a weaker dollar.

Friday provided a test for the third option: the U.S. economy created only 29,000 jobs, and yet its currency did not retreat. Winter purchases are therefore being built on a persistently weak euro.



FX Rates: The Technical Outlook

Two thresholds gave way in rapid succession against the dollar.

The 1.13 level collapsed last week, with Friday’s session closing at 1.1253.

The year’s floor of 1.1216 was breached this Monday morning during Asian trading, the rate slipping to 1.116.

Up next are the hurdles at 1.11 and 1.10. North American hotel, cruise and incoming services priced in dollars thus cost more than in September.

The move isn’t limited to the dollar alone. On Wednesday, the euro hit its best level of the year against the Swiss franc, at 0.9486, only to shed 1.33% the following day; today it trades around 0.929 franc.

Over the week it also fell 1.17% against the British pound, and 0.45% against the Canadian dollar. It stands this Monday at 0.846 pounds, barely above its annual low of 0.8455.

Waiting for a rebound is essentially a bet on one of the three exit doors mentioned above. Splitting purchases, rather than committing all at once, reduces the risk this bet entails but does not eliminate it.

Dubai clearly illustrates the direct impact of this slide. The United Arab Emirates dirham has been pegged to the dollar since 1997, at 3.6725 dirhams per dollar, and it remains fixed.

A stay in the Emirates therefore tracks the euro against the dollar exactly, with no cushion: today it takes about 4.10 dirhams for one euro, versus nearly 4.13 on Friday. For departures already booked, the margin shrinks accordingly.


WEEKLY SUPPORTS WEEKLY RESISTANCES
S2 S1 R1 R2
EUR/USD 1.1028 1.1140 1.1366 1.1478
EUR/GBP 0.8329 0.8414 0.8584 0.8669
EUR/CHF 0.9140 0.9234 0.9420 0.9514
EUR/CAD 1.5714 1.5875 1.6195 1.6356
EUR/JPY 174.09 175.86 179.42 181.19


The supports and resistances shown below indicate, respectively, the lower and upper points within which prices are expected to move during the week.



The information presented in this publication is provided for informational purposes only and does not constitute investment advice, an offer to sell, or a solicitation to buy, and should in no case be used as a basis or be considered an inducement to engage in any investment.


Mondial Change is a French financial establishment, founded in 2015, specializing in the management of international payments and exchange risk.

Mondial Change supports a wide range of tourism players, travel agencies, tour organizers, tour operators, and inbound operators…

www.mondialchange.com

Contact : [email protected]


Currencies: The Euro Under Pressure in a Stressed Market [ABO]


Economic Situation

Devises : l’euro sous pression dans un marché sous tension  - Depositphotos.com,  Andy Dean Photography

CroisiEurope


The word “stagflation” is on the lips of analysts everywhere, but let us be clear: we have not reached that point yet, and panic is not warranted as long as vigilance remains.

German inflation expected at +2.4% in May remains barely above the ECB target, and Germany’s GDP even surprised on the upside in Q1 with +0.3% quarter-on-quarter. It is hard to call this stagnation under such conditions.

Yet three signals deserve attention. Budget deficits are widening, with France at 5.1% of GDP and Germany at 3.7% according to the European Commission, which reduces governments’ capacity to absorb a fresh shock.

The US-Iran confrontation keeps Brent around $105 a barrel, up 25% since January, an energy pressure that is gradually seeping into production chains. And British industrial order books, a solid leading indicator for Europe, are at their weakest since 2020.

The ECB finds itself in a bind. A rate hike in June seems likely, but it would probably be the last one of the cycle. The real question then becomes: when will the first easing occur, in the autumn or later?

For the euro, this uncertainty already weighs on it. EUR/USD has moved from 1.2019 to 1.1617 over four months, supported by a real rate differential that continues to favor the dollar. If the eurozone indeed slides into stagflation this summer, the ECB would have little real room to maneuver, and the single currency would keep retreating.



Exchange Rates: The Technical Snapshot

EUR/USD hovers around 1.1625 this Monday after a 1.4% pullback over the week, well off the peak of 1.1784 touched ten days ago. The 1.15–1.17 zone should cap trading this week.

To breakout above 1.18, a clear signal of de-escalation in Hormuz would be required. To slip below 1.15, hawkish FOMC minutes or another acceleration in inflation would be needed. Both scenarios remain plausible.

The Swiss franc continues to defy gravity even as the dollar recovers. EUR/CHF trades between 0.9150 and 0.9200. The CHF is no longer just a cyclical safe haven; it has become a structurally strong currency. As long as Hormuz remains tense, betting against the Swiss franc looks risky.

The yen, meanwhile, stays under pressure. EUR/JPY sits around 186, and the weekend underscored the central issue: Prime Minister Takaichi publicly praised the benefits of a weak yen while her Finance Ministry attempts to curb depreciation. This internal contradiction prevents a durable rebound. The risk of BoJ intervention is rising again, making this pair one to watch closely.

The pound stays trapped in a vise. EUR/GBP ranges between 0.8580 and 0.8620. The Bank of England should hold rates steady, and Wednesday’s UK inflation will be the real catalyst. With a forecast rise to 3.4% year-on-year, the pound suffers from a paralyzed central bank and a cooling economy, a combination that leaves little room for maneuver.


WEEKLY SUPPORTS WEEKLY RESISTANCES
S2 S1 R1 R2
EUR/USD 1.1480 1.1550 1.1700 1.1780
EUR/GBP 0.8560 0.8600 0.8680 0.8720
EUR/CHF 0.9050 0.9080 0.9150 0.9200
EUR/CAD 1.5850 1.5950 1.6080 1.6180
EUR/JPY 182.50 183.80 185.80 187.00


The supports and resistances shown below indicate, respectively, the lower and upper points within which prices are expected to move during the course of the week.



The information presented in this publication is provided for informational purposes only and does not constitute investment advice, nor a sell offer, nor a solicitation to purchase, and should in no way serve as a basis or be considered as an incentive to engage in any investment.


Mondial Change is a French financial institution, founded in 2015, specializing in managing international payments and currency risk.

Mondial Change also supports numerous players in tourism: travel agencies, group organizers, tour operators, receptive units…

www.mondialchange.com

Contact: [email protected]