EUR/USD strengthens above 1.1650, budget uncertainty might cap gains
- EUR/USD edges higher to around 1.1670 in Monday’s early European session.
- S&P downgraded France to A+ as budget uncertainty remains elevated.
- Fed’s dovish stance and ongoing US federal shutdown might weigh on the USD.
The EUR/USD pair gains traction near 1.1670 during the early European session on Monday. The Euro (EUR) strengthens against the US Dollar (USD) amid improved risk sentiment. However, elevated budget uncertainty in France might cap the upside for the major pair. Traders brace for the German September Producer Price Index (PPI) data later on Monday.
Bloomberg reported on Saturday that S&P Global Ratings downgraded France to A+ from AA-. The downgrade means France has lost its AA- rating at two of the three major credit assessors in little more than a month, including downgrades from Fitch and DBRS.
The downgrade followed a week of political turmoil where French Prime Minister Sebastien Lecornu barely survived two no-confidence votes in parliament. To gain enough support to stay in power, his new government had to sacrifice President Emmanuel Macron’s deeply unpopular 2023 pension reform. The political crisis in France might undermine the shared currency against the USD in the near term.
Across the pond, the US Federal Reserve (Fed) is expected to cut interest rates by a quarter of a percentage point at the upcoming meeting on October 28-29, 2025. Markets have priced in nearly a 100% probability of a Fed rate cut in the October meeting, according to the CME FedWatch tool. This would bring the federal funds rate target range to 3.75%-4.00%.
The ongoing US federal government shutdown could undermine the US Dollar against its rivals. The government shutdown has entered its 20th day with no end in sight, after senators failed for the 10th time to resolve the impasse in votes on Thursday. The shutdown is now the third-longest funding lapse in modern history.
- EUR/USD edges higher to around 1.1670 in Monday’s early European session.
- S&P downgraded France to A+ as budget uncertainty remains elevated.
- Fed’s dovish stance and ongoing US federal shutdown might weigh on the USD.
The EUR/USD pair gains traction near 1.1670 during the early European session on Monday. The Euro (EUR) strengthens against the US Dollar (USD) amid improved risk sentiment. However, elevated budget uncertainty in France might cap the upside for the major pair. Traders brace for the German September Producer Price Index (PPI) data later on Monday.
Bloomberg reported on Saturday that S&P Global Ratings downgraded France to A+ from AA-. The downgrade means France has lost its AA- rating at two of the three major credit assessors in little more than a month, including downgrades from Fitch and DBRS.
The downgrade followed a week of political turmoil where French Prime Minister Sebastien Lecornu barely survived two no-confidence votes in parliament. To gain enough support to stay in power, his new government had to sacrifice President Emmanuel Macron’s deeply unpopular 2023 pension reform. The political crisis in France might undermine the shared currency against the USD in the near term.
Across the pond, the US Federal Reserve (Fed) is expected to cut interest rates by a quarter of a percentage point at the upcoming meeting on October 28-29, 2025. Markets have priced in nearly a 100% probability of a Fed rate cut in the October meeting, according to the CME FedWatch tool. This would bring the federal funds rate target range to 3.75%-4.00%.
The ongoing US federal government shutdown could undermine the US Dollar against its rivals. The government shutdown has entered its 20th day with no end in sight, after senators failed for the 10th time to resolve the impasse in votes on Thursday. The shutdown is now the third-longest funding lapse in modern history.
Free Forex Signals 
Leave a comment