The U.S. government shutdown has led to the cancellation of several key publications, while in the eurozone, S&P Global and Hamburg Commercial Bank (HCOB) will release October business activity data on Friday at 10:00 (GMT+2). Forecasts suggest that France’s manufacturing PMI will rise slightly from 48.2 to 48.3 points, while the services PMI will dip from 48.5 to 48.4. In Germany, indicators are expected to register at 49.5 and fall from 51.5 to 51.0, while in the eurozone overall, a decline from 49.8 to 49.5 and from 51.3 to 51.1 is anticipated. Meanwhile, France’s domestic political situation remains unstable due to strong parliamentary divisions as lawmakers work to agree on the new fiscal year budget.

Prime Minister Sébastien Lecornu managed to finalize government formation and avoid two no-confidence votes thanks to an alliance with the Socialists. However, budget discussions promise to be tense. President Emmanuel Macron does not plan to resign, although such a move could potentially renew public sentiment. The U.S. dollar remains under pressure amid expectations of monetary policy easing by the Federal Reserve, possibly at the October meeting. Another rate cut in December is also being discussed. Meanwhile, the ongoing shutdown—now in its third week—remains unresolved as the Senate has failed for the 11th time to pass a temporary funding bill, securing only 50 of the required 60 votes.

GBP/USD

The pound is slightly declining in the GBP/USD pair, testing the 1.3370 level for a downward breakout. The instrument maintains a solid short-term bearish trend, retreating from the local highs of October 7 updated earlier this week. Today, investors are focused on the latest UK statistics: the core CPI slowed from 3.6% to 3.5% in September, while the broader index remained at 3.8% year-over-year and fell from 0.3% to 0.0% month-over-month. The annual retail price index dropped from 4.6% to 4.5%, and the monthly one—from 0.4% to –0.4%. The inflation acceleration had been expected, as Bank of England officials previously mentioned it. Nonetheless, these figures will influence the regulator’s future decisions on lowering borrowing costs. Some Monetary Policy Committee members have stated it would be best to wait at least until March 2026 before additional easing. The pound also came under mild pressure from the Office for National Statistics (ONS) report showing public sector borrowing rising from £15.32 billion to £20.24 billion (forecast: £20.50 billion). In the U.S., few macro releases have been published due to the ongoing shutdown, with the Senate rejecting a temporary funding bill for the 11th consecutive time, despite growing pressure on Democrats. Massive layoffs at federal agencies continue — notably, the Department of Energy has furloughed most staff at the National Nuclear Security Administration (NNSA), except those in critical roles.

NZD/USD

The New Zealand dollar shows mixed trading dynamics in the NZD/USD pair, consolidating near the highs from October 16. The instrument is testing the 0.5750 level for an upward breakout as traders assess the macroeconomic data released yesterday. Exports in September fell from $5.85 billion to $5.82 billion, while imports rose from $7.08 billion to $7.18 billion, narrowing the trade deficit from –$3.06 billion to –$2.25 billion, offering some support to the national currency. Meanwhile, credit card spending reported by the Reserve Bank of New Zealand (RBNZ) dropped sharply from 3.3% to 0.2%, a bearish signal as it correlates with consumer confidence. The dairy price index rose 21.9% in early October after falling –1.6%, which could positively impact export revenues. Inflation data for Q3 also met expectations: the annual CPI accelerated from 2.7% to 3.0%, and the quarterly figure—from 0.5% to 1.0%, reinforcing investor confidence that the regulator will maintain a wait-and-see policy. In the U.S., the shutdown continues and could soon rival the 35-day record of 2019. The Senate has again failed to approve temporary funding through November, but officials expect resolution soon following recent mass rallies.

USD/JPY

The U.S. dollar is losing ground in the USD/JPY pair after a strong bullish surge in the previous session — the most significant rise in months. The uptrend was driven by the appointment of Liberal Democratic Party leader Sanae Takaichi as Japan’s new prime minister. Known for her conservative stance, she opposes further monetary tightening by the Bank of Japan and advocates constitutional revision to enable Japan to maintain a full-fledged army.

Today, investors and forex traders are focused on Japan’s trade data for September: exports rose 4.2% after –0.1% previously (forecast: +4.6%), and imports climbed 3.3% after –5.2% (forecast: +0.6%), narrowing the trade deficit from –242.8 billion yen to –234.6 billion yen, while analysts had expected a surplus of 22.0 billion yen. On Friday at 01:30 (GMT+2), inflation data will be released: core CPI excluding fresh food is projected to rise from 2.7% to 2.9%, potentially supporting further rate hikes by the Bank of Japan. At 07:00 (GMT+2), leading and coincident indicator indexes will follow, with forecasts pointing to 107.4 points. Meanwhile, the U.S. dollar remains under pressure amid expectations of a Fed rate cut as early as October, with some analysts predicting a 50-basis-point reduction despite limited economic data. The U.S. Senate, however, has again failed to approve a temporary funding bill — the eleventh rejection in a row.

XAU/USD

The XAU/USD pair is showing moderate declines, extending Tuesday’s strong bearish impulse. Gold prices dropped more than 6% after a sustained rally that pushed the metal close to the 4400.00 mark. Beyond technical factors, gold is pressured by anticipation surrounding next week’s meeting between U.S. President Donald Trump and China’s President Xi Jinping. Trump earlier announced 100% tariffs on Chinese imports, later raising them to 150% in response to Beijing’s export restrictions on rare earth metals. The countries also recently introduced mutual “port tariffs,” which could weigh on maritime trade. Analysts additionally note that India’s seasonal surge in jewelry demand has ended, dampening physical gold demand. Meanwhile, the U.S. shutdown enters its third week, and the Senate has once again failed to pass a temporary funding bill through November.