Will the U.S. Dollar's Weakness and the Canadian Dollar's Strength Keep European Currencies on an Upward Trajectory?

Will the U.S. Dollar's Weakness and the Canadian Dollar's Strength Keep European Currencies on an Upward Trajectory?

30.10.2026 New

In the U.S. currency market the previous day, the U.S. dollar traded slightly weaker against major currencies as the yield on the 10-year U.S. Treasury note fell from 5.05% to 4.98%. The dollar-yen exchange rate fluctuated between 157.61 and 158.13 yen on the 29th and closed around 157.71 yen.U.S. GDP for the July–September quarter rose at an annualized rate of 3.4%, exceeding the forecast of 3.2%, but AI-related stocks saw notable declines in the stock market.Meanwhile, the Canadian dollar was supported by the narrowing interest rate differential following the Bank of Canada’s rate hike, and the USD/CAD pair temporarily fell to around 1.3966. The Canadian dollar traded near its highest level in about six weeks.

European currencies reacted as the ECB kept its deposit facility rate at 2.50% and pointed out the risk of upward pressure on inflation due to energy prices.Although the euro fell briefly after the announcement, it recovered against the U.S. dollar, partly due to the dollar’s weakness. On the 29th, the euro/dollar pair traded in a range of $1.1105 to $1.1186 and closed near $1.1180.Attention was also drawn to ECB President Lagarde’s announcement that she will step down on February 7, 2027. Meanwhile, the pound is awaiting the impact of the UK budget, with the focus on the relative strength of the euro and the pound, as well as interest rate outlooks.

Today’s key event is a press conference by Bank of Japan Governor Ueda scheduled for 3:30 p.m., where attention will focus on his explanation of this afternoon’s decision to keep interest rates unchanged and the upward revision to the inflation outlook.In Europe, France’s preliminary CPI will be released at 4:45 p.m., followed by Germany’s preliminary GDP at 6:00 p.m. and the eurozone’s preliminary GDP at 7:00 p.m. In the U.S., the Employment Cost Index for the July–September quarter will be released at 9:30 p.m., while Canada’s August GDP will be released at the same time.Additionally, the Chicago Purchasing Managers’ Index is scheduled for 10:45 p.m. We will be monitoring the reactions of the U.S. dollar, the Canadian dollar, and European currencies to these releases.