The euro edged slightly higher in European trading on Monday against a basket of major currencies, attempting to recover from a three-month low versus the US dollar amid renewed buying at lower levels.

However, the single currency remains under downward pressure after eurozone inflation slowed in October, easing price pressures on European Central Bank policymakers and reinforcing expectations for an interest rate cut in December.

Price Overview

• EUR/USD rose 0.1% to 1.1538 from an opening level of 1.1528, after touching a session low of 1.1522.

• The euro closed Friday down 0.25% against the dollar — its third consecutive daily decline — hitting a three-month low of 1.1521 following softer-than-expected inflation data.

• For October, the euro lost 1.7% versus the dollar, marking its first monthly decline in three months amid political tensions in France and heightened geopolitical risks in Eastern Europe.

US Dollar

The dollar index slipped 0.1% on Monday, pulling back from a three-month high of 99.84 points, reflecting a pause in the greenback’s rally against major and minor counterparts.

Aside from profit-taking, the dollar eased ahead of key US manufacturing data for October, which could offer fresh clues about economic momentum in the fourth quarter.

European Interest Rates

• Data released Friday showed headline eurozone inflation slowed in line with expectations in October, while core inflation remained steady — reducing pressure on the ECB to maintain a restrictive stance.

• Following the report, money markets raised the probability of a 25-basis-point ECB rate cut in December from 10% to 25%.

• Investors are now awaiting additional economic releases across Europe, along with fresh comments from ECB officials, to reassess the likelihood of near-term policy easing.

The Japanese yen weakened in Asian trading on Monday at the start of the week, resuming losses against the US dollar after a brief rebound on Friday. The currency was once again nearing its eight-month low, pressured by expectations of expansive fiscal stimulus under Prime Minister Sanae Takaichi.

Japan’s new prime minister is reportedly preparing a massive stimulus package aimed at supporting the world’s fourth-largest economy — a move that could further delay the Bank of Japan’s plans to normalize monetary policy or raise interest rates anytime soon.

Price Overview

• USD/JPY rose 0.2% to 154.25 yen from an opening of 153.95 yen, after hitting a session low of 153.94 yen.

• The yen had gained 0.1% against the dollar on Friday, ending a three-day losing streak as it rebounded slightly from an eight-month low of 154.45.

• Aside from technical buying at lower levels, the yen found some support after stronger-than-expected inflation data in Tokyo revived speculation of a potential rate hike in December.

• Overall, the yen fell 4.2% against the dollar in October — its second consecutive monthly loss — following the election of Sanae Takaichi as Japan’s first female prime minister.

New Stimulus Package

According to government sources cited by Reuters, Prime Minister Takaichi is preparing an economic stimulus package likely to exceed 13.9 trillion yen ($92 billion) to help households cope with rising prices and inflation. The final size of the package is still being discussed, and an announcement is expected in early November.

Interest Rate Outlook

• Although Bank of Japan Governor Kazuo Ueda sent his strongest signal yet last week that a rate hike could come in December, markets remain skeptical of the central bank’s gradual approach.

• The probability of a 25-basis-point rate hike in December is holding around 50%.

• Investors are awaiting further data on inflation, unemployment, and wage growth to reassess those odds.

Yen Forecast

Rodrigo Catril, senior FX strategist at National Australia Bank, said: “If we start moving toward the 155 level, we can expect stronger verbal intervention from Japanese authorities — and possibly even a higher risk of direct market action.”

He added: “In reality, this situation underscores one thing — the Bank of Japan cannot afford to wait much longer.”

Most cryptocurrencies rose on Friday as risk appetite recovered, though the broader market remains on track for a 7% loss this month.

The rebound in sentiment followed signs of easing trade tensions between the United States and China after the two nations reached what investors viewed as a truce agreement.

However, traders also kept a close watch on developments in Eastern Europe, as US mediation efforts to end the Russia–Ukraine war appeared to stall.

In comments made earlier today, the heads of the Federal Reserve Banks of Kansas City and Dallas expressed reservations about the Fed’s decision this week to cut interest rates by 25 basis points, citing the risk of inflation amid what they described as a relatively stable labor market.

The Federal Reserve lowered its benchmark rate to a range of 3.75%–4.00%, though Chair Jerome Powell cautioned that another rate cut at the December meeting remains uncertain.

Ethereum

As of 19:48 GMT, Ethereum surged 5.3% to $3,895.1.

The contours of the global hydrogen industry came into sharper focus this month during European Hydrogen Week in Brussels — particularly from the perspective of importing nations.

Yet, the mood was one of frustration. Many participants described Europe’s regulatory framework as overly complex and slow-moving, causing project delays and deterring investors. Still, there was an undercurrent of inevitability, given binding EU mandates and ongoing pipeline projects positioning Europe to become the world’s largest demand hub for low-carbon hydrogen.

Despite a rising number of project cancellations, the industry’s determination to move forward was evident.

Jorgo Chatzimarkakis, CEO of Hydrogen Europe, remarked that “the tourists have left,” referring to the exit of weaker projects from the market. He called for more realism in policy design, including mandatory minimum offtake agreements for heavy industries.

He noted that the hydrogen sector stands at a crossroads, urging policymakers to ease regulatory burdens so that a viable clean hydrogen market can finally take shape.

Projects and progress

The conference showcased several major initiatives. Among them was a long-term supply agreement between Germany’s RWE AG and France’s TotalEnergies, under which 30,000 metric tons of green hydrogen will be transported annually from a 300-megawatt electrolyzer in Lingen to Total’s refinery in Saxony-Anhalt via a 600-kilometer pipeline starting in 2030.

In Rotterdam, Shell presented updates on its 200-megawatt electrolyzer, designed to produce around 22,000 tons of green hydrogen per year, to be delivered through a new 30-kilometer pipeline to Shell’s Energy and Chemicals Park.

Ivana Jemelkova, CEO of the Hydrogen Council — an industry coalition of major corporate leaders — unveiled findings from the Global Hydrogen Compass, produced in collaboration with McKinsey & Company.

According to the report, committed investment in low-carbon hydrogen has surpassed $110 billion — a tenfold increase over the past five years — with roughly 500 projects having reached final investment decision, construction, or operational stages.

These projects are expected to support between 9 and 14 million tons of annual clean hydrogen capacity by 2030. China leads with $33 billion in committed capital, followed by North America with $23 billion, and Europe with $19 billion.

“The industry is in real build mode,” Jemelkova said, noting that 97% of CEOs view hydrogen as essential for decarbonizing hard-to-abate sectors.

Regulation and reaction

Senior representatives from Oman and India presented ambitious national hydrogen programs focused on domestic investment and market development as stepping stones to future exports.

However, they bluntly stated that compliance with current EU rules is “impossible,” calling for greater regulatory clarity from Brussels.

At the heart of the problem lies the source of electricity used for electrolysis.

The European Commission has issued what industry participants describe as excessively strict rules defining what qualifies as a “renewable fuel of non-biological origin” (RFNBO) under the updated Renewable Energy Directive (RED III).

EU targets require that 42% of hydrogen used in industry by 2030 be classified as RFNBO, rising to 60% by 2035. The criteria are built around three core principles:

• Additionality: renewable electricity used must come from new capacity, not existing plants.

• Temporal correlation: power and hydrogen production must occur within the same hour starting in 2028.

• Geographic correlation: both must be produced within the same region.

These rules apply to hydrogen made within Europe and to imports — a point many companies consider unworkable, as it artificially inflates costs.

Industry leaders are urging Brussels to delay the enforcement of additionality and temporal correlation requirements until viable business models can mature.

At the member-state level, implementation is even more complex, as national governments apply RED III through their own incentives, infrastructure, and certification systems — a slow process that has frustrated developers.

Werner Ponikwar, CEO of thyssenkrupp nucera, which supplies electrolysis equipment, said: “The industry needs clarity to plan. What we need from Brussels is a regulatory environment that enables progress, not one that blocks it.”

Building the backbone

RED III mandates binding renewable hydrogen quotas: EU members must integrate the 42% industrial target into their national energy and climate plans. The directive also includes sub-targets for transport and aviation to stimulate demand for hydrogen, its derivatives, and synthetic fuels.

In transport, member states must either cut fuel emission intensity or ensure that 29% of total energy use comes from renewables, with sub-quotas for hydrogen and bio- and synthetic fuels.

In aviation, sustainable fuel must reach at least 34% of total use by 2040, including a dedicated share for hydrogen-based synthetic fuels.

While shipping faces no direct quotas, it falls under the EU Emissions Trading System (ETS).

These mandates are accelerating midstream infrastructure development. The EU has mapped five key hydrogen corridors — using new pipelines or repurposed gas lines — to form an integrated hydrogen commodity market centered on Germany.

The 600-kilometer RWE–TotalEnergies pipeline will form part of the North Sea Corridor, one of the first links in Germany’s emerging hydrogen grid, which will eventually connect to the Dutch network from Rotterdam.

When the stars align

Martin Tengler, head of hydrogen research at BloombergNEF, outlined how the market could scale.

Based on Bloomberg’s database of projects with binding offtake contracts, global hydrogen supply is expected to reach 5.5 million tons by 2030 — just 20% of announced national targets.

Tengler identified four “stars” that must align to drive the market forward:

• Financing: a greater share of the $270 billion in government subsidies must go toward stimulating demand.

• Demand incentives: tools like contracts for difference (CfDs) and binding quotas, which have yet to be deployed at scale.

• Carbon pricing: essential to make clean hydrogen competitive with gray hydrogen, though current carbon prices remain too low to matter before the 2030s.

• Midstream infrastructure: ports, pipelines, and storage facilities require continued public support.

He highlighted the RWE–TotalEnergies deal as a textbook case of this alignment — RWE received €690 million in German state aid, while Total faces RED III obligations and high carbon prices at home, compelling it to pay a premium over gray hydrogen costs.

Germany’s public funding for hydrogen pipeline infrastructure also enabled the agreement.

Resilience as a new demand driver

A major theme of the discussions was hydrogen’s role in enhancing economic resilience amid surging energy demand from data centers and ongoing geopolitical disruptions.

Domestically produced and stored low-carbon hydrogen was portrayed as a strategic fuel for Europe’s energy security, prompting governments to defend mandatory quotas and absorb infrastructure costs to support the nascent sector.

The concept of “resilience” may thus emerge as a new demand driver — complementing subsidies, mandates, and quotas — pushing Europe one step closer to its overarching goal of transforming low-carbon hydrogen into a competitive traded commodity underpinned by reduced regulatory and financial risks.