Will the Yen's Appreciation Continue Amid Falling Interest Rates? Will the Direction of European Currencies Change?

Will the Yen's Appreciation Continue Amid Falling Interest Rates? Will the Direction of European Currencies Change?

23.10.2026 New

In the previous day’s U.S. currency trading, the U.S. dollar weakened against safe-haven currencies such as the yen as U.S. tech stocks were sold off and U.S. Treasury yields fell sharply. The yield on the 10-year U.S. Treasury note stood at around 4.96%, and the dollar-yen exchange rate fell from the low 158-yen range to the high 156-yen range.Meanwhile, rising crude oil prices provided support for the Canadian dollar, and the USD/CAD exchange rate fell to around 1.40 Canadian dollars. Although U.S. initial jobless claims came in at 194,000, below the forecast of 200,000, dollar selling dominated the foreign exchange market due to falling stock prices and declining interest rates.

In the European currency market, the euro faced resistance on the upside amid concerns over France’s fiscal situation and a decline in European bank stocks. The European bank stock index fell more than 4%, and the yield spread between French and German government bonds widened.While the euro struggled to gain ground against the dollar, trading in the low $1.12 range, the Swiss franc was bought as a safe-haven asset, causing the dollar to fall to the low 0.82 franc range. The pound traded sideways around $1.34, and performance varied among European currencies.With today’s U.K. retail sales and PMI data on the horizon, all eyes are on whether market sentiment will shift.

Today’s key economic indicators include the release of the UK’s September retail sales data at 3:00 p.m., with forecasts calling for a 0.1% month-over-month decline and a 1.0% year-over-year increase. At 5:30 p.m., the UK’s preliminary October Manufacturing and Services PMI figures will be released, and the pound’s reaction will be closely watched.At 21:30, Canada’s August retail sales figures are due, with a 1.3% month-over-month increase expected. Following that, the U.S. October PMI flash estimate at 22:45 is likely to provide clues regarding the direction of the U.S. dollar. We will be monitoring consumer trends in the UK and Canada, as well as U.S. business sentiment.