UK CPI hits 3.5%, French yields top 5%; the pound and euro barely move

UK inflation rose to 3.5% and France's 10-year yield topped 5% for the first time since 2002, yet on our feed the pound gained only 0.11% against the dollar and the euro slipped 0.04%. The Australian dollar gained the most, 0.36%, after an inflation warning from the Reserve Bank of Australia, and USD/CAD posted a fifth lower close in a row.

What the data showed

• GBP · UK CPI: 3.5% on the year in September, against a 3.4% forecast and up from 3.1%, its highest since October 2025, Action Forex said. Core inflation rose to 2.8% from 2.6%, matching expectations, and services inflation to 3.7% from 3.4%, investingLive reported. Headline and core both landed on the Wells Fargo forecasts that our weekly wrap cited, and Wells Fargo had said a rise in core would reinforce its call for a Bank of England hike in November.

The pound and the euro

• The pound rose 0.11% to 1.33937 after a high of 1.34032 at 12:09 UTC; FXStreet said after the close that it barely moved on the data and had not closed above 1.3400 since 15 September. It was a second close above 1.3341, where Action Forex said a sustained break would raise the chance of a bullish reversal, and the session's low, 1.33595, stayed above that line. Brown Brothers Harriman saw a 25 basis-point hike to 4.00% on 5 November as largely assured.

• EUR/USD slipped 0.04% to 1.12322. France's 10-year government bond yield rose above 5% for the first time since 2002, according to Action Forex, which put the spread of French bonds over swaps at a record 146 basis points; FXStreet said after the close that the euro hardly moved on the 5% yield. Against the pound the euro fell 0.14% to 0.8386, and Action Forex said EUR/GBP hit its lowest since late May 2025.

The Aussie, the kiwi and the loonie

• AUD/USD rose 0.36% to 0.70279, its fourth higher close in a row, above 0.7012, the resistance whose break Action Forex said confirmed a short-term bottom. Reserve Bank of Australia Deputy Governor Andrew Hauser said early in the session that the inflation outlook appeared worse than forecast, and Action Forex said his warning lifted the odds of a November hike from about 27% to 40–45%. NZD/USD rose 0.28% to 0.57007, its fifth higher close in a row.

• USD/CAD fell 0.09% to 1.40467, its fifth lower close in a row. It traded above 1.4081, the level from Action Forex's weekly outlook that our wrap cited, only in the 14:00 UTC hour, and its low of 1.40384 stayed above the 1.3985 that Action Forex's daily outlook targets. FXStreet tied the loonie's gains in European hours to rising oil and Bank of Canada hike bets.

Oil, gold and the yen

• WTI rebounded in Asian hours after Tuesday's fall on the Iran deal reports: FXStreet had it around $98.60 as traders weighed mixed reports on US-Iran diplomacy, and approaching $99 in European hours on increased attacks in the Strait of Hormuz and threats to Saudi oilfields. It edged lower in the US afternoon after the US authorized the offloading of cargo from some blocked vessels, the same source said, and late in the session turned back up on renewed concerns that hostilities could resume in the Middle East, investingLive said, citing a Reuters report that the State Department was preparing to order some staff and families out of US embassies across the Gulf. After the close, FXStreet said Thursday's rise in Asian hours halted a three-day losing streak.

• Gold rose 0.35% to $4,134.54 on our feed, ending a run of three lower closes, and its low of $4,104.74 at 19:03 UTC held above $4,100, the level FXStreet said bears were waiting to see broken.

• USD/JPY slipped 0.02% to 158.134. Bank of Japan Deputy Governor Ryozo Himino said underlying inflation was almost at the 2% target, and FXStreet said after the close that the pair had held between 157.50 and 159.00 for 12 sessions.

Market gauges and what's next

Our proprietary metrics at the close of the session:

• Readings: an MRS of 73, unchanged from Tuesday. A CTS of 54 with its carry backdrop at 60 out of 100, and an FSI of 55, Neutral, from 53.

• Our strength table: no currency clearly led or trailed. The top two on minutes in first place were four apart, 242 and 238 of the session's 1,421, which ended the Swiss franc's two sessions of clear leads.

• The dollar: it closed lower against six of the seven majors and higher only against the euro, but by 0.11% or less against all except the Australian and New Zealand dollars. MUFG said US housing data disappointed and markets scaled back bets on an October Fed hike, though it still expects one in December.

• Last week's test: EUR/USD stayed between 1.1111 and 1.1276, the two lines our weekly wrap set, for a third session, so the tell is still open.

Today: US weekly jobless claims are due at 12:30 UTC, forecast at 200,000 from 199,000. After the close, New Zealand's third-quarter CPI rose 3.7% on the year, below the 3.8% expected, investingLive reported.