Daily Market View 13-10-2025

USD- 

Whilst we're not even quite a full two weeks into October, the Dollar is presently having its best month of the year, up 1.22% since the start of the month.

This is quite the coop, given just how bearish the mid-year outlooks were with regards to USD, but the sudden near collapse of the French Government, the victory of the Trump-style new Japanese PM and now fresh alarm over the levels of Sovereign debt have triggered a run into USD.

It is certainly a politically motivated rally, rather than a data led fundamental rally and the US data blackout that is coming as a result of the shutdown is likely helping USD for the moment. The Pound has been out of the news over the past week, but has been caught by Dollar resurgence, with GBPUSD weaker by 1% MTD. 

Trump did dent the rally on Friday by threatening 100% tariffs on Chinese software parts, somewhat up scuttling the calmness that has characterised the US this month.

Even if delayed US inflation data releasing next week confirms the Fed can go ahead with possibly two more rate cuts this year, its bearish impact on USD will likely depend a great deal on whether France and Japan have figured their respective political issues. 

Given how long these issues can drag on, I suspect USD could maintain this latest rally for some time yet.

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