|

Euro steadies as US yields retreat, traders assess Fed and ECB signals

  • EUR/USD rebounds as a pullback in US Treasury yields limits the Greenback’s advance.
  • Higher Oil prices keep inflation risks elevated on both sides of the Atlantic.
  • Fed minutes favour another hike this year, while the ECB keeps its policy options open.

EUR/USD rebounds during American trading hours on Thursday as a pullback in US Treasury yields tempers the US Dollar’s (USD) momentum. However, France’s fiscal concerns and broader US Dollar strength keep the Euro (EUR) pinned near the 17-month low touched earlier this week. At the time of writing, the pair trades around 1.1202, recovering from an intraday low of 1.1171.

The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 102.24, below Monday’s peak of 102.53, its highest level since April 2025. Meanwhile, the benchmark 10-year US Treasury yield eases toward 5.28% after reaching 5.36% on Wednesday, its highest level since 2002.

Despite the retreat, Oil-driven inflation risks and expectations of additional interest rate hikes by the Federal Reserve (Fed) keep upward pressure on yields. Concerns over government debt and resilient US economic growth also contribute to elevated borrowing costs.

Oil prices rebound on Thursday, with West Texas Intermediate (WTI) gaining over 3% after reports that the Pentagon has ordered preparations for possible renewed strikes on Iran. The threat of renewed escalation raises concerns that energy prices could stay high for longer, making it harder for both the Fed and the European Central Bank (ECB) to bring inflation back to their 2% targets and adding pressure to keep monetary policy tight.

Minutes from the Fed’s September monetary policy meeting, released on Wednesday, show that officials acknowledged inflation remained elevated, the labour market was near maximum employment and economic activity was expanding at a solid pace. Most participants considered another rate increase likely appropriate by year-end, with the CME FedWatch Tool placing the odds of a December hike at around 86%.

On the European side, the ECB’s September meeting account, released on Thursday, revealed that policymakers saw the outlook as highly uncertain and critically dependent on geopolitical developments, with upside risks to inflation and downside risks to growth. Updated staff projections indicated that inflation would stay well above target for an extended period. Officials stressed that future decisions should remain data-dependent, without committing to a particular rate path.

A Reuters poll conducted October 5-8 shows that 70 of 73 economists expect the ECB to hold its deposit rate at 2.50% on October 29, while 64 of 73 anticipate a 25-basis-point hike in December.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.04%-0.04%0.03%-0.12%0.12%-0.01%-0.00%
EUR0.04%0.00%0.07%-0.05%0.09%0.02%0.04%
GBP0.04%-0.00%0.08%-0.10%0.10%0.02%0.05%
JPY-0.03%-0.07%-0.08%-0.16%0.03%-0.07%-0.01%
CAD0.12%0.05%0.10%0.16%0.19%0.11%0.15%
AUD-0.12%-0.09%-0.10%-0.03%-0.19%-0.06%-0.04%
NZD0.01%-0.02%-0.02%0.07%-0.11%0.06%0.07%
CHF0.00%-0.04%-0.05%0.01%-0.15%0.04%-0.07%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Author

Vishal Chaturvedi

I am a macro-focused research analyst with over four years of experience covering forex and commodities market. I enjoy breaking down complex economic trends and turning them into clear, actionable insights that help traders stay ahead of the curve.

More from Vishal Chaturvedi
Share:

Editor's Picks

AUD/USD consolidates above 0.6950 amid risk aversion

AUD/USD consolidates in the Asian session on Thursday, trading just above 0.6950 as traders assess developments in the Middle East crisis. The Pentagon reportedly ordered readiness for potential strikes against Iran. This keeps the geopolitical risk premium in play, which, along with hawkish FOMC Minutes and elevated US bond yields, will likely keep the US Dollar underpinned at the expense of the pair.

USD/JPY slips below 158.00 as USD retreats

USD/JPY returns to the red below 158.00 in the Asian session on Thursday amid speculation that authorities will step in to prop up the Japanese Yen. Meanwhile, the US Dollar eases from near an 18-month high on profit taking, ignoring Wednesday's hawkish FOMC Minutes and the risk of a further escalation of tensions in the Middle East, adding to the pair's pullback.

Gold picks up pace; focus is back to $4,150

Gold regains some composure and climbs back to the vicinity $4,150 mark per troy ounce amid decent gains on Thursday. The yellow metal’s recovery follows some loss of momentum in the US Dollar strength and a mild drop in US Treasury yields in the 10y-30y segment.

Crypto Today: Bitcoin, Ethereum, XRP extend sell-off amid ETF outflows
Bitcoin (BTC) extends its decline below $83,000 on Thursday as heightened selling pressure weighs on the market. Leading altcoins, including Ethereum (ETH) and Ripple (XRP), mirror the sector-wide pullback, with ETH dipping under $2,600 and XRP challenging support at $1.40.
ECB expected to pause in October before hiking rates in December – Reuters poll
The European Central Bank (ECB) is expected to leave interest rates unchanged in October before delivering another increase in December, according to a Reuters poll conducted October 5-8. The survey shows that 70 of 73 economists expect the ECB to hold its deposit rate at 2.50% on October 29, while 64 of 73 anticipate a 25-basis-point (bps) hike in December.
The UK 30-year gilt just hit a 1998 high. Is that good or bad for the British Pound?
The yield on the UK's 30-year government bond, or gilt, went through 6% on October 1 for the first time since early 1998, and on Monday the Pound was at its strongest against the Euro since June 2025. The gilt market's 28-year high is mostly someone else's. Since early May, the 30-year gilt yield has risen about 0.15 of a percentage point and the US 30-year about 0.7.