EUR trading defensively on weaker German IP – Scotiabank

The Euro (EUR) is soft, down 0.3% against the US Dollar (USD) on the back of a weaker than expected industrial production release from Germany, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

EUR risk reversal remain weak

"The 4.3% August decline is delivering fundamentally driven weakness for the EUR, reflecting a slight softening of ECB rate expectations. The shift in EUR drivers is welcome, given that recent EUR weakness has been driven by sentiment and concerns related to the political situation in France."

"Outgoing PM Lecornu has made little progress in his latest attempt at coalition building, however markets appear to have calmed somewhat with a notable narrowing in the France-Germany 10Y yield spread. EUR risk reversal remain weak, and are now pricing a slight premium for puts over calls."

Oct 8, 2025

AUD/USD: Likely to head lower and test the 0.6555 support level – UOB Group

Increasing downward momentum suggests Australian Dollar (AUD) is likely to head lower and test the 0.6555 support level. In the longer run, the odds of AUD breaking below 0.6555 are increasing, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

NZD/USD: Next support at 0.5690 is unlikely to come into view – UOB Group

Scope for New Zealand Dollar (NZD) to test 0.5720; the next support at 0.5690 is unlikely to come into view. In the longer run, outlook for NZD has shifted to negative; the level to watch is 0.5690, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.