The euro rose in European trading on Friday against a basket of global currencies, extending its gains for the fourth consecutive session against the US dollar and reaching its highest level in nearly two weeks. It was also on track for its biggest weekly gain in three months, supported by positive political developments in France, the eurozone’s second-largest economy.

Newly appointed French Prime Minister Sébastien Lecornu suspended the 2023 pension reform until after the presidential elections scheduled for 2027, in a move aimed at easing political and social tensions in the country.

Price Overview

• The EUR/USD exchange rate rose by 0.2% to 1.1712 dollars — its highest since October 7 — from an opening level of 1.1687 dollars, after touching a low of 1.1681 dollars.

• The euro ended Thursday’s session up by 0.35% against the dollar, marking its third consecutive daily gain, supported by easing political uncertainty in France and continued weakness in the US currency.

Weekly Performance

Over the course of this week, which concludes with today’s market close, the euro is up about 0.8% against the US dollar — on track for its second weekly gain in the past three weeks and its largest weekly advance since July.

Political Developments in France

French Prime Minister Sébastien Lecornu announced the suspension of the 2023 pension reform until after the 2027 presidential elections, aiming to reduce political and social tensions and responding to strong pressure from left-wing lawmakers who warned that pushing ahead with the reform could threaten the political stability of the new government.

This move allowed Lecornu to survive two no-confidence votes in the French parliament this week, granting his government a temporary reprieve and an opportunity to present a new budget for the eurozone’s second-largest economy.

Analysts view these developments as a shift toward less austere fiscal policies compared to the previous administration, reflecting Lecornu’s intent to calm public sentiment and strengthen confidence in his nascent government.

At the same time, French bonds delivered strong performance, becoming the best among their eurozone peers, according to economist Marc Chandler, who noted that markets view the easing of austerity measures and enhanced political stability in Paris positively.

European Interest Rates

• Market pricing currently shows less than a 10% probability of a 25-basis-point rate cut by the European Central Bank in October.

• Traders have scaled back expectations for further monetary easing by the ECB, suggesting that the current rate-cutting cycle may have ended for this year.

• Investors are awaiting a series of upcoming economic data releases in Europe, along with remarks from ECB officials, to reassess the outlook for interest rate policy.

The Japanese yen rose in Asian trading on Friday against a basket of major and minor currencies, extending its gains for the fourth consecutive session against the US dollar and reaching its highest level in nearly two weeks. The currency was on track for a weekly gain following hawkish comments from Bank of Japan Governor Kazuo Ueda, which strengthened expectations of an interest rate hike in Japan before the end of the year.

The yen’s advance was also supported by a decline in the US dollar across foreign exchange markets, as well as by growing political activity among Japan’s opposition parties seeking to unite behind a consensus candidate for prime minister — a move aimed at ending the Liberal Democratic Party’s long-standing political dominance.

As a result, Sanae Takaichi faces mounting challenges on her path to power, especially after the sudden withdrawal of Komeito, the Liberal Democratic Party’s traditional coalition partner, which significantly weakens her chances and deepens political uncertainty in Japan during this critical period.

Price Overview

• USD/JPY fell by 0.35% to 149.90 yen — its lowest level since October 6 — from an opening of 150.42, after hitting a high of 150.43.

• The yen ended Thursday’s session up 0.4% against the dollar, marking its third consecutive daily gain following Ueda’s comments.

Weekly Performance

Over the course of the week — which officially concludes at today’s market close — the Japanese yen is up about 0.8% against the US dollar and on track to record its second weekly gain in the past three weeks.

Kazuo Ueda

Bank of Japan Governor Kazuo Ueda said in Washington on Thursday that the central bank remains prepared to raise its key interest rate if the likelihood of achieving its growth and inflation forecasts increases.

Japanese Interest Rates

• Following Ueda’s remarks, market pricing for a 25-basis-point rate hike by the Bank of Japan at its October meeting rose from 25% to 35%.

• The yen swap market now indicates a 50% probability of a rate hike by December, up from 41% before Ueda’s comments.

US Dollar

The US Dollar Index fell by 0.15% on Friday, extending losses for the fourth consecutive session and hitting a two-week low of 98.16 points, reflecting continued weakness in the American currency against a basket of global peers.

This decline came amid renewed trade tensions between the United States and China, as well as less hawkish comments from Federal Reserve officials that reinforced expectations for two rate cuts before the end of this year.

Political Developments in Japan

Japan’s political scene remains in turmoil following the resignation of Prime Minister Shigeru Ishiba on September 7 and the continuation of his cabinet in a caretaker role. Sanae Takaichi, leader of the Liberal Democratic Party, faces a steep challenge in her bid for the premiership after the sudden withdrawal of Komeito from the ruling coalition on October 10, which cost her party its parliamentary majority.

This development has opened the door for opposition unity, with the Constitutional Democratic Party — Japan’s largest opposition group — seeking to form an alliance with Komeito to support a consensus candidate, Yuichiro Tamaki, who is emerging as a strong contender to lead a united opposition bloc.

Although the Liberal Democratic Party remains the largest parliamentary group with 196 seats, its waning influence and the growing momentum of the opposition point to a possible political shift in the world’s fourth-largest economy.

Opinions and Analysis

• A note from Bank of America highlighted that attention is now turning toward the runoff in Japan’s prime ministerial election, which will take place in two rounds. The two candidates with the highest votes in the first round will advance if neither secures an outright majority. The note explained that if the House of Representatives and House of Councillors choose different candidates, the decision of the lower house will take precedence.

• The bank added that “despite the challenges facing the opposition in unifying their ranks, the three main opposition parties collectively hold more seats than the Liberal Democratic Party.” It emphasized the importance of monitoring ongoing discussions, including Komeito’s position, to determine which side it will support in the decisive runoff.

Bitcoin came under renewed pressure on Thursday, trading near 110,600 dollars and testing its main ascending trendline support. Rising geopolitical tensions and renewed trade friction between the United States and China have weakened risk appetite among investors, limiting momentum in high-risk assets.

According to a report from Copper Research, Bitcoin could retest the 100,000-dollar level before regaining upward momentum.

Slowing Price Recovery Amid Weak Risk Appetite

Bitcoin’s rebound slowed this week as escalating tensions between Russia and Ukraine, coupled with renewed trade disputes between Washington and Beijing, pushed the world’s largest cryptocurrency to around 110,600 dollars on Thursday.

US Defense Secretary Pete Hegseth warned Russia on Wednesday of “potential consequences” if it continues its aggression in Ukraine, while President Donald Trump said earlier this week that he is considering supplying Kyiv with long-range Tomahawk missiles.

Meanwhile, the US–China trade conflict deepened as both sides imposed reciprocal port tariffs this week. Trump described the relationship with China as a “full-scale trade war” and said he is considering halting cooking oil trade with Beijing in response to its refusal to buy American soybeans.

In contrast, Treasury Secretary Scott Bessent proposed suspending US tariffs on Chinese imports for more than three months if Beijing abandons its plans to impose strict export restrictions on rare earth elements.

This combination of geopolitical and trade conflicts between the world’s two largest economies has created uncertainty and risk aversion across markets — conditions that typically weigh on high-risk assets like Bitcoin.

Copper Report: A Healthy Corrective Pullback Possible

Copper Research’s Tuesday report suggested that historical patterns point to a potential short-term dip, projecting a retest of the 100,000-dollar level this month — near long-term support around the 52-week moving average. The firm noted that similar corrective phases occurred in 2014, 2018, and 2022.

The report stated: “A decisive break below the 52-week average would represent a structural market shift similar to those seen in 2014, 2018, and 2022, which is unlikely to occur before 2026.”

Fadi Abu Alfa, head of research at Copper, told FXStreet: “Despite recent market turbulence, Bitcoin’s movement remains consistent with long-term patterns converging near the 52-week average. With strong ETF inflows and supportive technical indicators, a temporary pullback toward 100,000 dollars should be viewed as a healthy correction rather than a cause for concern.”

Optimism Indicators: Funding Rates Fall to Lowest Since FTX Collapse

Despite pressure, some signs of optimism have emerged. A wave of leverage unwinding has triggered unprecedented stress in futures markets, with funding rates falling to levels unseen since the FTX collapse in late 2022.

Annualized funding rates have turned deeply negative, meaning traders are paying a premium to maintain short positions after excessive long positions were flushed out. This marks a sharp sentiment shift as participants reduce risk amid forced liquidations.

Historically, such extreme conditions often represent peak fear and the final phase of deleveraging — typically paving the way for a medium-term recovery.

Technical Outlook: Momentum Indicators Point to Further Correction

Bitcoin faced rejection at the 50-day exponential moving average (EMA) near 115,154 dollars on Tuesday, falling about 4% the following day.

At the time of writing, the price was trading around 110,600 dollars, approaching the ascending trendline.

If the price breaks and closes below the trendline, the decline could extend toward daily support at 107,245 dollars — close to the 200-day EMA at 108,084 dollars.

The Relative Strength Index (RSI) at 40 indicates growing bearish momentum, while the MACD has maintained a negative crossover since last week, reinforcing the corrective outlook.

On the upside, if the price regains strength, it may retest the 50-day EMA near 115,154 dollars.

Most US stock indexes rose during Thursday’s session amid strong demand for technology shares, particularly artificial intelligence companies.

US Treasury Secretary Scott Bessent said that President Donald Trump’s administration plans to intervene in certain sectors and impose minimum price floors on products in response to what he described as China’s “market manipulation.”

Amid ongoing trade tensions, China accused the US government of causing global alarm over restrictions on rare earth metal exports.

The third-quarter 2025 earnings season kicked off this week, with several major banks reporting strong profits and revenues.

This came despite the US government shutdown entering its sixteenth day with no signs of resolution. Bessent said the shutdown is costing the American economy 15 billion dollars per day.

Separately, Federal Reserve Board member Steven Miran said on Thursday that two additional interest rate cuts this year appear realistic, citing clear signs of a significant slowdown in inflation.

Miran added that while he personally favors a 50-basis-point rate cut at the upcoming meeting, he expects the Fed will instead opt for a 25-basis-point reduction.

As of 16:37 GMT, the Dow Jones Industrial Average rose 0.2% (83 points) to 46,337 points, the broader S&P 500 index gained 0.3% (18 points) to 6,689 points, and the Nasdaq Composite climbed 0.5% (112 points) to 22,782 points.