ECB officials see eurozone data matching forecasts, keeping rates on hold until December amid uncertainties, while markets anticipate less ECB-Fed policy divergence after Powell downplayed a December cut, pressuring EURUSD but likely holding above support. German factory orders rose 1.1% and French industrial output gained 0.8% in September—beating expectations and driven by foreign demand despite U.S. tariffs—with analysts expecting ECB rate cuts and fiscal support to aid recovery. Two well known banks note narrowing U.S.-Europe growth gaps and easing trade risks, forecasting ECB rates steady until mid-2026 and EURUSD rising to $1.20 by Q4 2025 and $1.26 by Q3 2026; upcoming data includes eurozone retail sales (+0.2% MoM expected), German industrial production (+3.0% MoM rebound), and construction PMI, signaling modest improvement.

PM Sanae Takaichi’s growth strategy, emphasizing cautious monetary tightening and fiscal expansion, signaled prolonged ultra-loose policy and delayed BOJ rate hikes, weakening the yen to new lows as traders sold it for carry trades. Finance officials, including Minister Katayama and Vice Minister Mimura, urgently warned of excessive yen weakness defying fundamentals, ready to intervene if disorderly, while noting reduced long-yen positions amid trade, geopolitical, and fiscal factors; BOJ minutes revealed debate with rates held at 0.5% (7-2 vote), though Governor Ueda eyed a possible December hike if wage momentum builds—September nominal wages rose 1.9% YoY but real earnings fell 1.4% for the ninth month, underscoring waning shunto gains and eroding consumer power.

The RBA’s decision to hold rates at 3.6% and signal no further cuts until mid-2026, amid rising core inflation and a neutral policy stance, supports AUD appreciation into 2026, with short-term dips likely holding and contained. Australia’s stronger GDP growth (1.8–2.3% through 2027) versus the US, combined with a stable job market and rising asset prices, bolsters domestic demand, while improving China-US trade ties boost commodity exports and global risk appetite. Recent data shows a sharp September export rebound (7.9% MoM) driven by higher commodity prices and demand from China, alongside modest import growth, widening the trade surplus.