U.S. Dollar Weakens as Crude Oil Prices Fall; Attention Turns to the Euro's Potential for Recovery

U.S. Dollar Weakens as Crude Oil Prices Fall; Attention Turns to the Euro's Potential for Recovery

26.10.2026 New

In the U.S. currency market the previous day, on Friday, the 23rd, attention focused on price movements in the U.S. dollar and the Canadian dollar against the backdrop of rising crude oil prices and a recovery in long-term U.S. interest rates.Canada’s August retail sales rose 1.2% month-over-month, falling slightly short of the expected 1.3% increase, but rebounded from the previous month’s decline, while higher crude oil prices and speculation about a rate hike by the Bank of Canada also supported the Canadian dollar.The USD/CAD pair briefly fell to around 1.3969. The USD/JPY pair traded within a range of 156.07 to 157.17 yen and, as of the start of the week on the 26th, is still searching for direction in the upper 156-yen range.

On Friday, the 23rd, European currencies were weighed down by concerns over France’s fiscal situation, causing the euro to briefly fall to around $1.1185 against the dollar. While caution regarding France’s fiscal health persisted in the government bond market, Moody’s decision over the weekend to maintain the country’s credit rating at Aa3 provided a sense of relief.On the 26th, the euro/dollar pair rebounded to the low 1.12 range, while the pound/dollar pair remained firm in the high 1.33 range. We will be watching German business sentiment indicators for clues as to whether the euro can recover its recent losses.

Today’s key economic indicator is Germany’s October Ifo Business Climate Index, scheduled for release at 6:00 p.m. The previous reading was 89.9, and changes in companies’ assessments of current conditions and future outlook will be the focus of the euro market.In the U.S., there are relatively few major economic indicators today, so attention is likely to turn to interest rate expectations ahead of the FOMC meeting on the 28th of this week. In Canada as well, with a monetary policy decision coming up this week, market participants will be watching the reaction of crude oil prices and the Canadian dollar. We will monitor price movements in North American and European currencies separately to gauge the overall market direction.