Trading about 0.8% above the 2026 low of 1.1113. Flash composite PMI eased to 51.9. French 10-year yields hit a 24-year high above 5% last week, then eased to about 4.99% after Moody's affirmed Aa3 (negative outlook) instead of the expected downgrade.
EUR: the ECB is expected to hold (ECB: deposit rate 2.50%, main refinancing rate 2.65% since 16 Sep); growth is soft and French fiscal risk weighs. USD: Fed on hold now with a December hike about 80% priced. The two roughly offset.
A daily close below the 2026 low at 1.1113 is bearish. FXStreet: RSI about 39 and the 20-day EMA at 1.1254 caps; a sustained break above it eases the downside pressure.
3Rates & central banks22-23 Oct 2026
Fed repricing: October hike odds near 9%, December hike about 80% priced
What it meansThere will be no hike on Wednesday, but a December hike is almost fully priced. Warsh's tone decides the next move in yields, the USD, gold and BTC.
Market reaction10-year Treasury yield back below 5% on 26 Oct after ending last week at 5% (FXStreet); dollar index 101.80, little changed (Reuters)
- Next 24 hours
- A whipsaw is likely between the statement and the presser.
- 2 to 5 days
- The dot plot is not due at this meeting; guidance is the only signal.
- 2 to 12 weeks
- It decides the December path.
Read the full report
The Fed funds range is 3.75-4.00% after a September hike (12-0 vote). In a Reuters poll (16-20 Oct), 94 of 100 economists expect a hold on 28 Oct and all 100 expect a December hike. September CPI was 3.7% y/y (core 2.6%).