Europe Summary and Highlights 2 October
Then USD weakened through the European morning, with the JPY once again leading the way.
European morning session
Then USD weakened through the European morning, with the JPY once again leading the way. USD/JPY lost 50 pips to 146.65, while EYR/USD gained just 15 pips to 1.1755, while the commodity currencies were not much changed.
Data was limited to Swiss September CPI, which was in line with consensus on a m/m basis at -0.2%, but a little weaker than expected on a y/y basis at +0.2%. EUR/CHF initially gained around 10 pips to trade above 0.9360 but dropped back to just above opening levels. JPY strength was helped by comments from BOJ Deputy Governor Uchida saying the BoJ would continue hiking rates if the economic outlook was supportive as suggested by the latest Tankan.
Asia session
The Australian August 2025 trade balance came in lower than expected at +1825mn, with export contracting by 7.8% m/m and import higher at 3.2%. The fall in export is mostly dragged by gold export and the broad softness in commodity price. AUD/USD is trading 0.06% higher at 0.6617, NZD/USD is trading 0.25% higher at 0.5813 while USD/CAD rises 0.06%.
The 10-year government bond auction for Japan showed weaker demand as market participants remain cautious about the prospect of an October hike. 10yr JGB yields are closing in to annual high once again. It is also reported that U.S. will provide Ukraine with intelligence for long-range missile strikes on Russia’s energy infrastructure, which is a potential significant escalation if executed. USD/JPY is trading 0.11% higher at 147.20. Else, EUR/USD is up 0.03% and GBP/USD unchanged.