G10 Currency Outlook 14th October 2025

A calm moment before another global storm?
The past week in currency markets has been anything but dull. Trade tensions, political headlines, and data gaps are all shaping sentiment across the G10 space. Below is a quick, currency-by-currency look at what’s driving markets right now, and what to watch as we move deeper into October. 

The US dollar’s rally has paused as traders digest the latest US-China trade war escalation. President Trump’s threat of fresh tariffs initially knocked the greenback lower, but safe-haven demand quickly stepped in to support it. 

Meanwhile, the US government shutdown continues with no clear resolution, limiting the flow of new economic data and clouding the Fed outlook. Despite the uncertainty, investors still see the dollar as the most reliable safe-haven, particularly after Japan’s recent political shift dented confidence in the yen. 

Summary: The dollar’s momentum has slowed, but it remains underpinned by global caution and safe-haven flows. 
 

The euro continues to struggle under the weight of French political instability and ongoing weakness in German industrial output. Markets remain uneasy about France’s fiscal gridlock, while Germany’s sharp industrial contraction has amplified eurozone growth concerns. For our recent analysis of how French political instability affected sterling and the euro, see our weekly FX roundup.

With few major data releases this week, investors are watching whether political tensions in Paris ease or intensify, either could dictate the euro’s next move. 

Summary: The euro remains on the defensive, with sentiment fragile and upside limited until political risks fade. 

Sterling is holding steady for now, but it’s increasingly data-sensitive. UK employment has softened for several months, though GDP figures show some resilience. Markets are already looking ahead to the Autumn Budget on 26 November, which may offer clues on fiscal support heading into 2026. 

Until then, the pound is largely moving in tandem with the euro, reflecting broader European risk sentiment rather than UK-specific drivers. 

Summary: GBP is steady, but its direction depends on upcoming fiscal policy announcements and global risk tone. 

The yen weakened after the election of Sanae Takaichi, whose expansionary fiscal plans raised concerns about Japan’s deficit and the likelihood of further Bank of Japan tightening. Despite the ongoing US shutdown, the yen has lost ground as investors question its traditional safe-haven role. 

Authorities have so far avoided direct FX intervention, opting instead for verbal guidance. 

Summary: JPY remains under pressure from political change and shifting investor perception.

CHF - Safe Haven with Limits 

The Swiss franc remains well supported amid the renewed US-China tensions and uncertainty around the US fiscal standoff. However, Switzerland’s heavy trade exposure to the US where tariffs remain steep, tempers enthusiasm for the currency. 

Swiss officials continue to pursue closer trade ties with China, a move aimed at balancing risk and diversifying export exposure. 

Summary: CHF benefits from risk aversion, but trade vulnerabilities cap its upside.
 

The Reserve Bank of New Zealand’s surprise 50-basis-point cut caught markets off guard, triggering a sharp sell-off in the kiwi. Policymakers pointed to weak GDP, subdued demand, and rising unemployment as reasons for easing. 

Despite inflation near the top of target, the RBNZ signalled openness to further cuts, leaving traders braced for more downside in November. 

Summary: NZD remains under pressure from a dovish RBNZ and global trade headwinds. 

The Australian dollar fell sharply as the US renewed threats of tariffs on China - Australia’s largest trading partner. With risk sentiment fragile, traders are focused on upcoming RBA minutes and the September jobs report. 

The Reserve Bank’s hawkish hold last month suggests no immediate rate cuts, but a weak jobs number could shift expectations. 

Summary: AUD faces short-term downside from trade fears but could rebound if US rhetoric cools. 

The Swedish krona slipped last week despite stronger GDP and industrial data. Inflation edged below expectations, and with the Riksbank nearing its terminal rate, policy looks set to stay steady. 

External forces, particularly US dollar strength, remain the key driver of SEK direction for now. 

Summary: Krona’s domestic recovery is overshadowed by the dollar’s dominance.

CAD - Strong Jobs, Weak Momentum 

The Canadian dollar has struggled despite a standout jobs report (+60k vs +5k expected). The data reduced the odds of an October rate cut, but falling oil prices and a firm USD continue to limit CAD gains. 

Markets are also watching the upcoming CPI release, which could shape the Bank of Canada’s tone heading into year-end. 

Summary: CAD remains under mild pressure, supported by strong data but capped by weak oil and a stronger USD. 

The Norwegian krone outperformed most peers last week even as oil prices slipped. Inflation remains elevated (3.6% headline, 3.0% core), making additional rate cuts unlikely this year. 

This week’s focus is on industrial confidence and global trade developments, both of which could steer NOK sentiment. 

Summary: NOK looks resilient; domestic inflation supports while global risk appetite drives swings.

CNY - Steady in a Storm 

The Chinese yuan sits at the centre of the storm as US-China tensions flare once again. China’s export controls on rare earths and Washington’s tariff threats have rattled confidence, yet the PBoC’s firm fixing has helped keep the currency stable. 

Recent data show mixed signals, consumption weakened over Golden Week, but exports surged 8.3% year-on-year, showing resilience through diversification. 

Summary: CNY remains steady thanks to central bank management, but sentiment depends heavily on the next trade headlines.

Final Word - The Common Thread 

Across the G10 landscape, politics and policy uncertainty are the dominant forces. The dollar still commands the market’s trust, but it’s a fragile leadership, dependent on fear rather than growth. Europe is battling internal fractures, and the commodity currencies remain chained to China’s fate. 

As always, timing matters. The weeks ahead could bring sharp swings as narratives shift from trade war rhetoric to domestic fiscal policy on both sides of the Atlantic. For strategies to protect against currency volatility during uncertain periods, see our comprehensive forward contracts guide.

Written by the Strategic FX desk at Lamera Capital who are focused on providing clear insight and smarter timing for global currency decisions.