Dollar and G10 FX: DXY, Euro, Sterling Daily — 2026-10-27
The US Dollar Index (DXY) is holding firm near 101.60 as traders await the Federal Reserve's decision, with the Euro weakening below 1.12 due to French fiscal concerns and a widening rate differential with Germany. Sterling has slipped against the dollar but remains strong against the Euro, while speculative positioning shows increased net shorts on the British Pound.
Dollar and G10 FX: DXY, Euro, Sterling Daily — 2026-10-27
Top developments
Fed Meeting Begins with Dollar Firms
The US Dollar has firmed as the Federal Open Market Committee (FOMC) meeting began, with traders assessing the outlook for interest rates. The Dollar Index (DXY) is holding support around 101.60, reflecting expectations of a monetary policy pause by the Fed. This stability contrasts with the previous week, where the DXY edged down amid AI-related market jitters and geopolitical tensions.
Euro Weakens Below 1.12 on French Fiscal Concerns
EUR/USD has fallen to near 1.1170, pressured by risk-off sentiment and renewed financial stress across the Eurozone linked to France's fiscal situation. The Euro's decline is exacerbated by a widening rate differential between France and Germany, which has reached an extreme level of approximately 1.75%. Germany's Ifo business survey beat forecasts, but the Euro still dropped as traders bought dollars ahead of the Fed's decision.
Sterling Slips Against Dollar but Holds vs. Euro
The British Pound (GBP/USD) has slipped as the dollar holds firm ahead of the Fed decision, staying capped at 1.3407. However, Sterling edged up to a fresh 17-month high against the Euro on Friday, marking its fourth straight weekly gain. Traders are bracing for the UK Chancellor's budget on October 28, which is expected to influence GBP/USD volatility.
Speculators Increase Net Shorts on British Pound
CFTC Commitments of Traders (COT) data for the week ending October 20 shows that non-commercial traders added 26,544 contracts to their net short positions in the British Pound, bringing the total net short to -80,420 contracts. This indicates a bearish sentiment shift among speculators regarding Sterling, despite its strength against the Euro.
Local view
German Media: Euro Stability Amid Volatility Expectations
German financial outlet finanzen.net reports that the Euro remained largely unchanged against the Dollar on Monday, but noted that volatility is expected due to upcoming Fed and ECB decisions. The outlet highlights that oil prices are not currently boosting inflation expectations enough to provide a rate impulse, keeping the Euro-Dollar pair stable around 1.1206.
French Media: Dollar Supported, Pound Under Budget Pressure
Swiss-French outlet Allnews.ch notes that the Dollar remains supported while the Pound is under pressure ahead of the UK budget. The analysis points to the extreme rate spread between France and Germany as a key penalty for the Euro, keeping it depressed against the Dollar.
Japanese Media: Dollar Strength Reflects Divergence in Oil Resilience
Nikkei reports that Euro weakness against the Dollar reflects the US's greater resilience to oil price fluctuations compared to Europe. The widening gap between US and German interest rates is cited as a primary driver for the strong Dollar, with the Yen also showing selling pressure in London trading.
Context & numbers
- DXY Level: The US Dollar Index is holding support at 101.60.
- EUR/USD: Trading near 1.1170, with a bearish bias below the 100-day SMA.
- GBP/USD: Capped at 1.3407, with Sterling hitting a 17-month high against the Euro.
- Rate Differential: The spread between French and German bond yields is at an extreme ~1.75%.
- CFTC Positioning: GBP net shorts increased by 26,544 contracts to -80,420 in the week to Oct 20.
On the radar
- Fed Decision: The FOMC meeting concludes on Wednesday, October 28, with the policy decision and press conference expected to drive significant volatility in G10 currencies.
- UK Budget: Chancellor John Healey will deliver the first budget under Prime Minister Andy Burnham on Wednesday, October 28, around 12:30 GMT, impacting GBP/USD and EUR/GBP.
- ECB Decision: The European Central Bank decision falls a day apart from the Fed, adding another layer of complexity to EUR/USD trading.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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