The euro broke 1.1215 as US yields hit a 2002 high

Last week's note closed on a line: 1.1215 on EUR/USD. A session close below it, the note said, would mean the euro's slide was running on yields, energy and France rather than on the calendar of the Federal Reserve (Fed). The line held for two sessions. On Wednesday, with French bonds under pressure again, the US 10-year yield at its highest since 2002 and Brent back above $100, EUR/USD closed at 1.1196 on our feed. It closed below the line in every session after that.

That was the first half of the week: the bond market pushed and the euro gave way. The turn came on Thursday. Yields were already easing when President Trump said the US would not attack Iran before the midterm elections, and FXStreet tied the dollar's late selling to his comments and the pullback in crude that followed. On Friday Canada reported 68,300 jobs lost in September, and gold traded above $4,200 for the first time this week without closing there.

Monday to Wednesday: France, yields and the line

On Monday France's fiscal worries made the euro the weak spot of the session. EUR/USD touched 1.1161 in Asian hours, its lowest since May 2025 by the count of Brown Brothers Harriman (BBH). After the close FXStreet also tied the low to reports that Spain was preparing a snap election, with hedge-fund selling setting off option barriers on the way down. The Dollar Index reached an 18-month high near 102.50, FXStreet said. The Institute for Supply Management's (ISM) services index slowed to 54.9, below the 55.1 forecast, while its prices component jumped to 74.0.

Tuesday brought one day of relief. Brent fell below $98, bond yields in Europe and the US eased, and the extra yield investors want to hold French 10-year debt over Germany's narrowed to about 130 basis points from more than 150 on Friday, FXStreet said. EUR/USD closed at 1.1259, back where Monday had opened. In Canada, the Ivey purchasing managers' index (PMI) fell to 58.2 against a 65.2 forecast.

The relief lasted one day, Action Forex said on Wednesday: the French-German gap widened back toward 137 basis points, and the euro went from the strongest major to the weakest in a single session. Most of EUR/USD's 0.55% drop came between 07:00 and 08:00 UTC, about ten hours before the minutes of the Federal Reserve's September meeting. The 10-year Treasury yield touched 5.35%, its highest since April 2002 according to FXStreet, and Brent climbed back above $100 after Iran stepped up attacks on tankers in the Strait of Hormuz. Gold fell to $4,066 on our feed, its lowest since early August.

The minutes themselves changed little. Every participant had backed September's hike, and most considered that another increase would probably be appropriate by the end of the year, FXStreet reported, but that meeting came before the weak September payrolls report.

Thursday: Trump ruled out strikes before November, and yields backed off

Thursday started with oil. US crude, West Texas Intermediate (WTI), jumped above $90 on reports of Houthi attacks on Saudi airports, and investingLive had the 10-year yield at 5.345% in the European morning. At 16:42 UTC, by FXStreet's timestamp, Trump said the US would not attack Iran before the midterms. After the close FXStreet had the 10-year ending near 5.22%, and cited the New York Times saying Trump had ordered plans for three days of strikes all the same.

On our feed the dollar closed the day lower against six of the seven majors, all but the Australian dollar. Fed Governor Christopher Waller said more hikes are needed while inflation stays too high, but that they need not come at consecutive meetings; Action Forex summed it up as "pause is not pivot". That matched last week's reading that markets had taken October off the Fed's table, not rate hikes.

Friday: Canada's jobs and gold at $4,200

Canada's Friday report showed 68,300 jobs lost in September against a forecast gain of 6,100, after a fall of 41,700 in August. USD/CAD jumped to 1.4299 minutes after the release, at levels FXStreet said were last seen in April 2025, just short of the 1.43 that Rabobank said the pair had failed to break. TD Economics' weekly review said the data strengthened the case for a Bank of Canada pause later this month.

In the US, the University of Michigan's preliminary consumer sentiment index fell to 46.3 against 47.5 expected, and one-year inflation expectations rose to 4.7%. Gold reached $4,207 in Asian hours and closed at $4,195, up 1.5% on the day.

The week in our price feed

Last one-minute price before the Friday close in our own MT5 feed; changes are computed from unrounded prices. After two weeks higher against all seven, the dollar finished this one higher against five. The euro lost the most, the Australian dollar gained the most, and the New Zealand dollar finished level. Gold rose 1.15% on the week, from $4,148 to $4,195.

Two pairs went nowhere in a busy way. USD/CAD reached its 18-month high on Friday and ended the week up 0.04%. Since 24 September every session's low on GBP/USD has stayed within half a cent of 1.3200, FXStreet said, and our feed agrees; the pair ended the week almost where it started.

What our own gauges saw

Market Readiness Score (MRS), Carry Trade Score (CTS) and Forex Strength Index (FSI) readings at each session's close. The last two columns come from our strength table: the currency that spent the most minutes in first place, with its share, and the dollar's rank on that count. They measure time on top, not how far a currency moved, which is how the dollar could top the table on Thursday and still close lower against six of seven. The MRS held at 69 until Friday, when its volatility component fell from 11 to 4 points; its news component stayed at the full 20 all week. The CTS read 54 in every session. The FSI stayed Neutral for four sessions and moved into Greed on Friday, when its news and volatility components rose.

Over the 7,190 minutes our feed covered this week, the yen again spent the most minutes at the top of our strength table, 1,254 of them, and the euro was second again, on 1,009, in a week it lost more against the dollar than any other major. The US dollar was a close third, on 1,003. The table counts minutes in first place, not how far a currency moves.

What stays open

The next test is the US consumer price index (CPI) on Wednesday 14 October, the date both investingLive's week ahead and Action Forex give. Wells Fargo expects September prices to have risen 0.6%, driven by energy, while core inflation stays contained, which it calls consistent with a Fed hold in October. TD Securities expects core prices up 0.20% on the month, FXStreet reported. investingLive's week ahead puts the producer price index (PPI) and retail sales on Thursday.

Action Forex's weekly report says the dollar's rally "has lost momentum rather than direction". It lists three dates: CPI on 14 October, the Fed meeting on 27–28 October and the midterms on 3 November, a date it says Trump's decision on Iran has given extra weight. It also sees France as a separate source of support for the dollar: a renewed EUR/USD break below 1.1159 would provide one, particularly if the French-German gap moves back toward 150–159 basis points. On our feed Monday's low was 1.1161. In the UK, investingLive's tracker had the odds of a hike at the Bank of England's next meeting at 86% on Friday.

The tell to watch. $4,200 on gold. Gold has closed every session below it since 28 September, ten in a row on our feed, and since it fell through it that day it has climbed back above it three times without closing there: on 30 September, on 2 October and on Friday, when it closed $4.80 short. Lower yields helped it on Thursday and Friday. If gold closes a session above $4,200, the ceiling of the last two weeks has given way. If it gets through CPI and the rest of the week without one, the ceiling is still in charge.