The euro fell in European trading on Monday against a basket of global currencies, moving into negative territory versus the US dollar and resuming losses that had paused on Friday. The decline came amid political developments in France, particularly following the appointment of a close ally of President Emmanuel Macron as finance minister in the new French government.

With inflationary pressures once again mounting on policymakers at the European Central Bank, market expectations for further rate cuts this year have diminished. Investors are now awaiting additional economic data and comments from ECB officials to reassess the outlook for monetary policy.

Price Overview

• EUR/USD today: The euro declined by 0.3% to $1.1706, from Friday’s closing level of $1.1741, after recording an intraday high of $1.1731.

• On Friday, the euro rose more than 0.2% against the dollar — its first gain in three sessions — supported by a temporary pause in the greenback’s rally across global forex markets.

Political Developments in France

French Prime Minister Sébastien Lecornu appointed Roland Lescure as finance minister over the weekend in a new government tasked with tackling the budget crisis and securing passage of the fiscal bill. The move was seen by analysts as an attempt to calm markets and build a bridge for negotiation among the country’s fragmented parliamentary blocs.

Lescure, a close ally of President Emmanuel Macron, is viewed as a continuation of Macron’s fiscal agenda — a perception that has weighed on sentiment toward the new government. Lawmakers have warned that the administration could face swift collapse if it fails to depart meaningfully from previous policies.

European Interest Rates

• Data released last week showed that eurozone inflation rose in September in line with expectations, underscoring renewed price pressures facing ECB policymakers.

• Following the release, market pricing for a 25-basis-point rate cut by the ECB in October stabilized below 10%.

• Traders have scaled back bets on further monetary easing, signaling that the ECB’s rate-cut cycle may have effectively ended for this year.

• Sources close to the ECB indicated that policymakers see no need for additional rate reductions to achieve the 2% inflation target, despite forecasts suggesting lower rates over the next two years.

• Unless the eurozone suffers a major new economic shock, borrowing costs are expected to remain at their current levels for the foreseeable future.

The Japanese yen fell broadly across Asian markets on Monday against a basket of major and minor currencies, deepening losses for the third consecutive session versus the US dollar. It hit a two-month low, trading below 150 yen per dollar for the first time since early August, as open selling positions on the Japanese currency accelerated following Sanae Takaichi’s victory in Japan’s ruling Liberal Democratic Party (LDP) leadership race.

Takaichi is poised to become Japan’s first female prime minister and is widely viewed as having the most expansionary fiscal and monetary agenda among the five candidates who competed to succeed outgoing hawkish premier Shigeru Ishiba.

A vocal critic of the Bank of Japan’s recent efforts to normalize and tighten monetary policy after years of unprecedented easing, Takaichi’s rise to power is expected to delay any near-term rate hikes, as she is likely to favor a cautious, gradual approach to preserve Japan’s fragile economic growth.

Price Overview

• USD/JPY today: The dollar rose 1.8% to ¥150.10 — its highest level since August 1 — from Friday’s close of ¥147.46, after hitting an intraday low of ¥149.00.

• On Friday, the yen fell 0.15% against the dollar, marking a second straight daily loss amid continued profit-taking from its two-week high of ¥146.59.

• For the week, the yen gained 1.35% against the dollar, its first weekly advance in three weeks and the biggest since May, supported by safe-haven demand.

Takaichi’s Victory

Following weekend elections, Sanae Takaichi won the leadership of Japan’s ruling Liberal Democratic Party, becoming the first woman to hold the post since the party’s founding and paving the way for her to succeed Shigeru Ishiba as the next prime minister.

Her victory followed an intense internal contest focused on strengthening Japan’s defense capabilities, promoting industrial innovation, and maintaining economic stability amid mounting global pressures.

Analysts view her win as a significant political shift, given her conservative stance and past criticism of the BOJ’s tightening plans — suggesting a more cautious approach to rate hikes in the near term.

Speaking at a press conference after her victory, Takaichi said the government and central bank must work closely to achieve demand-driven inflation supported by higher wages and stronger corporate profits.

Market Overview

• The yen weakened broadly in the forex market and is on track for its biggest one-day loss against the dollar since May.

• Japan’s 30-year government bond yield climbed 13 basis points to 3.28%, just below last month’s record high of 3.285% reached after Ishiba’s resignation.

• Japanese stocks rallied sharply, with the Nikkei index surpassing 47,000 points for the first time in history.

Analyst Commentary

• Mahjabeen Zaman, head of FX research at ANZ in Sydney, said Takaichi’s victory “will likely lead to some weakness in the yen.”

• She added: “There’s a lot of near-term political and fiscal uncertainty, and the BOJ may exercise caution even as data supports a more hawkish stance.”

• Chris Weston, head of research at Pepperstone in Melbourne, said: “We’re in the eye of the storm,” as traders look for clues on how aggressively Takaichi will pursue fiscal stimulus.

• Weston added: “If markets sense she’ll follow a reflationary path similar to Abe’s, that could keep bond buyers sidelined — she’ll need to tread carefully if she goes down that route.”

Interest Rate Outlook

• Market pricing for a 25-basis-point rate hike by the Bank of Japan in October fell sharply from 45% to 10%.

• Yen swap markets on Monday reflected a 41% probability of a rate increase by December, down from 68% on Friday.

Bitcoin prices rose on Sunday, extending gains for the fifth consecutive day and hitting a new record high, with the cryptocurrency trading above $125,000 for the first time in history.

This historic rally comes amid a strong wave of optimism sweeping global markets, fueled by growing bets on continued monetary easing by the Federal Reserve, along with major regulatory reforms in the United States — the world’s largest crypto market.

Major global companies have launched a new round of Bitcoin purchases, driving their holdings of the leading cryptocurrency to fresh record levels, while inflows into US-listed spot Bitcoin ETFs remain strong.

Price Overview

• Bitcoin price today: On the Bitstamp exchange, Bitcoin rose by $3,267, or 2.7%, to an all-time high of $125,725, up from the opening price of $122,458, after touching an intraday low of $122,209.

• On Saturday, Bitcoin gained 0.25% on Bitstamp, marking its fourth consecutive daily rise amid sustained institutional demand for the leading crypto asset.

Market Capitalization

The total market capitalization of digital assets rose by over $100 billion on Sunday to reach an all-time high of $4.365 trillion, supported by record-breaking Bitcoin prices and further gains in Ethereum.

US Interest Rates

Expectations for a 50-basis-point rate cut by the Federal Reserve before the end of this year have now reached full pricing, following weak labor market data and moderate inflation readings in the US.

Several Fed policymakers have recently voiced support for near-term rate cuts in response to signs of economic slowdown.

Regulatory Reforms

Since the beginning of 2025, Bitcoin prices have climbed nearly 35%, boosted by major regulatory wins for the US digital asset industry — particularly after the return of President Donald Trump, who dubbed himself “the crypto president,” as his family expanded its investments in the sector.

One of the most notable measures was an executive order allowing digital assets to be included in 401(k) retirement plans, signaling a more flexible and supportive regulatory environment.

The year 2025 also saw the approval of new stablecoin regulations and updated SEC policies to align with digital assets, reinforcing positive momentum across the crypto market.

MicroStrategy

On X, MicroStrategy co-founder and executive chairman Michael Saylor announced a new Bitcoin purchase of 196 BTC, raising the company’s total holdings to another record level.

The purchases were made between September 23 and 28 at a total cost of $22.16 million, with an average price of $113,048 per Bitcoin.

Following this acquisition, the company now holds 640,031 BTC at an average purchase price of $73,980, valued at roughly $47.35 billion.

Metaplanet

Japanese firm Metaplanet also continued increasing its Bitcoin holdings, acquiring 5,268 BTC between September 23 and 30 for $615.67 million, at an average price of $116,870 per Bitcoin.

This raised its total holdings to a record 30,823 BTC, valued at $3.33 billion, with an average purchase price of $107,911 per Bitcoin.

This move mirrors MicroStrategy’s long-term strategy, signaling growing institutional confidence in digital assets.

ETF Inflows

Bitcoin exchange-traded funds (ETFs) added around $985 million in inflows on Friday, marking the fifth straight day of net positive flows, totaling roughly $3.24 billion across US-listed funds.

Outlook for Bitcoin

• IG analyst Tony Sycamore said: “Bitcoin’s rally reflects growing confidence in Federal Reserve rate cuts, sustained institutional demand, and the Trump administration’s supportive stance toward digital asset investment.”

• Sycamore added that “a sustained breakout above $125,000 could drive Bitcoin prices toward $150,000.”

Most cryptocurrencies rose during Friday’s trading as demand for risk assets rebounded, with investors largely ignoring the ongoing US government shutdown.

The shutdown — now in its third day — continues to raise concerns about a potential economic slowdown, inflation risks, and labor market weakness.

As a result of the shutdown, the Department of Labor has halted the release of key reports, including the September nonfarm payrolls.

The US Senate failed in a vote on Friday to end the shutdown, as partisan tensions between Republicans and Democrats deepened.

Data released Friday by the Institute for Supply Management (ISM) showed the services PMI falling by 2 percentage points to 50 last month, compared with expectations for only a slight drop to 51.8.

Ahead of the Federal Reserve’s October policy meeting, the probability of a rate cut currently stands at 96.7% according to the CME FedWatch tool.

Ethereum

On the trading side, Ethereum rose 0.6% to $4,526.2 on CoinMarketCap as of 20:43 GMT, with the cryptocurrency posting a weekly gain of 12.8%.