Euro dips on French turmoil, Aussie lifted by China growth
SPY•The euro fell 0.14% to $1.1223 as unrest in France added to concerns about its fiscal outlook, while the Australian dollar rose 0.63% after China reported 4.5% annual third-quarter growth. Fed funds futures priced in a 92% chance of a December rate hike and no move in October.
1. Euro pressured by unrest
The euro fell against the dollar on Monday as violent protests in France added to concerns about the country’s fiscal outlook. Prime Minister Sebastien Lecornu said he had asked local authorities to impose partial curfews. The spread between French and German government bonds widened to 144 basis points, from around 110 basis points in late September.
2. Aussie rises on China data
The Australian dollar rose 0.63% against the greenback after China’s economy expanded at a 4.5% annual pace in the third quarter, rebounding from three-year lows. The Canadian dollar was last up 0.27% after Canadian inflation came in at 3.1% in September, slightly below expectations, while the yen weakened 0.25% to 158.37 per dollar.
3. Rate outlook and dollar
The dollar index rose 0.06% to 101.86 as AI-related stocks rebounded. Fed funds futures showed traders expected rates to remain unchanged at the October 27-28 meeting and priced in 92% odds of a hike in December. Bank of Japan Governor Kazuo Ueda said underlying inflation was “quite close” to the central bank’s 2% target.
