Tuesday handed the euro no relief. EUR/USD traded near 1.1145, extending a run of five consecutive down days.
The dollar index sat near 102.20, close to a two-week high. Traders are paying for dollars ahead of Wednesday and Thursday.
Two US releases landed before the European close and both beat forecasts. The Conference Board put October consumer confidence at 91.7, up 7.5 points from an upwardly revised 84.2 in September and 10.7 points above the 81 consensus. The present-situation gauge rose to 120.4 and expectations recovered to 72.6. September durable-goods orders rose 1.8% to $345.4 billion, against a 0.6% forecast. Transportation equipment rose 4.6% to $119.8 billion. Orders have now risen in six of the past seven months. That run sits awkwardly next to a labour market that printed only 29,000 jobs in September.
That tension is what the Federal Reserve walks into on Wednesday, October 28. Markets price an 89.5% chance the Fed holds its target range at 3.75% to 4.00%. That figure comes from CME FedWatch via TalkMarkets, leaving a 10.5% implied chance of a hike. The September increase of 25 basis points was the Fed's first since 2023. Chair Kevin Warsh's press conference therefore carries more weight than the rate itself. CME pricing carried by FXStreet on October 27 still puts a December hike near 80%. A firmer warning on inflation would push that pricing higher and, with it, the dollar.
Why it matters
FXStreet's report put French public-finance worries at the centre of Tuesday's euro selling. Brown Brothers Harriman expects questions on Thursday to centre on France's debt-market strain when Christine Lagarde faces reporters. BBH read the ECB's position in two parts. Price pressures outside energy look restrained and credit conditions have tightened, which argues for patience. Activity has held up and inflation is expected to stay over target, which keeps a December move to 2.75% live at 75% priced. Euro-area inflation ran at 3.8% in September, so a hold on Thursday reads as a pause rather than a turn. A clear ECB signal that it will step in against disorderly spillover would, in BBH's view, support the euro. Without such a signal, BBH puts 1.1000 in reach, 1.30% below Tuesday's 1.1145.
Tuesday's other tapes back the FXStreet picture. Channel News Asia's Reuters-sourced report put the euro 0.26% lower at $1.1144 and the pound 0.18% lower at $1.3319, with ING's Francesco Pesole attributing the dollar's footing to calmer AI-stock sentiment. MarketRadar's snapshot showed the same alignment: EUR/USD at 1.1147 and GBP/USD at 1.3315.
What to watch
- Wednesday, October 28: Fed decision and Warsh press conference; hold priced at 89.5%, so language on December does the moving.
- Thursday, October 29: ECB decision, deposit rate expected at 2.50%, then Lagarde's press conference.
- Thursday, October 29: US third-quarter GDP and September PCE inflation, due the same day as the ECB call.
- Friday, October 30: Bank of Japan decision, closing three major central-bank meetings in three days.
- Levels: under 1.1140 opens the BBH path toward 1.1000; through 1.1215 signals easing pressure.
Key points
- EUR/USD near 1.1145 on October 27, down for a fifth consecutive session; dollar index near 102.20 after a 101.45 low last week.
- US consumer confidence rose to 91.7 in October from 84.2, beating the 81 forecast; present situation 120.4, expectations 72.6.
- September durable-goods orders rose 1.8% to $345.4 billion, above the 0.6% forecast.
- Fed expected to hold at 3.75% to 4.00% on October 28, with an 89.5% hold probability; December hike pricing near 80% as of October 27.
- ECB expected to hold at 2.50% on October 29 after 50 basis points of hikes this year; BBH puts a December move to 2.75% at 75% priced.
- BBH expects France's debt-market strain to centre Lagarde's press conference, with 1.1000 the downside marker.
MarketRadar take
| Level | Price | Reading |
|---|---|---|
| Tuesday trade | 1.1145 | Fifth straight down session |
| Near-term support | 1.1140 | Break opens the BBH path lower |
| BBH downside marker | 1.1000 | 1.30% below Tuesday's trade |
| First recovery marker | 1.1215 | 0.63% above Tuesday's trade |
| Second recovery marker | 1.1250 | 0.94% above Tuesday's trade |
Arithmetic, not a forecast, sets the shape of the next 48 hours. A move to 1.1000 costs the euro another 1.30% from Tuesday's level. A climb back to 1.1215 needs only 0.63%. The pair sits closer to its recovery markers, though five down days argue the path still points down. France is the variable that can break that symmetry. A credible ECB backstop line on Thursday cushions the euro without changing a single rate. Silence on contagion hands the dollar the next leg toward 1.1000.
