The Euro (EUR) has steadied against its rivals on Thursday, October 8, following midweek losses. The currency's performance has been closely tied to expectations around central bank policies, particularly the European Central Bank (ECB). Later in the day, key policymakers from the ECB, Bank of England (BoE), and Federal Reserve are scheduled to deliver speeches, which could influence market sentiment.
The Euro has been under pressure, particularly against the Canadian Dollar, with the widest losses observed in EUR/CAD. The widening French-German bond yield spreads and doubts about the ECB's ability to tighten policy have contributed to the Euro's bearish trend. EUR/USD fell over 0.5% on Wednesday, nearing a 17-month low of 1.1160, while EUR/JPY dropped 0.6%. Early Thursday, EUR/USD traded slightly below 1.1200.
Analysts at Commerzbank noted that recent developments have been somewhat supportive of the Euro, as the probability of a Fed rate hike in October has decreased. The FOMC minutes indicated that while many policymakers favor another rate increase this year, the timing remains uncertain. This has tempered the hawkish implications for the USD, offering modest relief for the EUR.
Meanwhile, crude oil prices gained traction, with West Texas Intermediate (WTI) rising over 2% to trade above $90.50. US stock index futures lost about 0.7%, reflecting a cautious market stance. Geopolitical tensions also played a role, with reports suggesting preparations for potential US military action in Iran.
In other currency movements, the Japanese Yen saw USD/JPY cling to small gains above 158.50, while Gold (XAU/USD) corrected higher after losing more than 1% on Wednesday. GBP/USD struggled near 1.3200, and AUD/USD traded in the red near 0.6950 after losing 0.3% on Wednesday.