The New Zealand Dollar ended the week on a higher note against the US Dollar, up 0.55% to 0.5652, as the Greenback weakened amid investors' skepticism about a Fed hike in October despite the US docket featuring red-hot inflation.

EUR/USD struggles to extend its gains on Friday as the US Dollar (USD) steadies after coming under heavy pressure on Thursday. At the time of writing, the pair trades around 1.1230, below an intraday high of 1.1269, but remains on track for its first weekly gain in six weeks.

AUD/USD trims some of its earlier gains on Friday as hawkish Federal Reserve (Fed) expectations cushion the downside in the US Dollar (USD) and US Treasury yields following the previous day’s pullback.

Scotiabank analysts highlight that Bank of England Governor Bailey sees little evidence of second-round inflation effects and a more resilient UK economy, with markets still pricing a 25bp hike next month.

The Mexican Peso lost ground against the Greenback on Friday amid broader US Dollar weakness, as Mexico’s economic docket is absent, leaving traders leaning into US dynamics. The USD/MXN trades at 18.49, up 0.47%.

The Pound Sterling advanced against the US Dollar on Friday after Fed Chair Kevin Warsh didn’t provide forward guidance on interest rates, while expectations that the Bank of England would hike rates in November supported GBP/USD, pushing it above 1.3350 and registering gains of over 0.61%.

USD/CAD extends its decline on Friday as broad US Dollar (USD) weakness lifts the Canadian Dollar (CAD) to its highest level in more than two weeks.

Scotiabank’s Global FX Strategy team notes EUR/USD is supported by modest narrowing in front-end Eurozone–US spreads following dovish-leaning comments from Fed Chair Warsh. French OAT/Bund spreads remain wide but are seen as a limited driver for the Euro.

EUR/USD extends its recovery on Friday, trading around 1.1255 at the time of writing, up 0.32% on the day. The Euro (EUR) continues to strengthen against the US Dollar (USD), rebounding from a 16-month low of 1.1113 reached on Wednesday.

Scotiabank strategists Shaun Osborne and Eric Theoret report the Canadian Dollar (CAD) modestly stronger versus the US Dollar, helped by firmer Bank of Canada rate expectations and narrowing US–Canada yield spreads. Fair value for USD/CAD is estimated close to spot around 1.4140.

Norman Liebke at Commerzbank highlights that Brazil’s presidential run-off on 25 October between Lula da Silva and Flavio Bolsonaro is closely watched by markets. A Bolsonaro victory would likely bring more market-friendly, fiscally conservative policies and closer ties to the United States.

GBP/JPY trades on the front foot on Friday, gaining around 0.50% as broad US Dollar weakness favours the higher-yielding British Pound (GBP) against the lower-yielding Japanese Yen (JPY), which underperforms all its major peers except the Greenback.

Thu Lan Nguyen at Commerzbank highlights that resilient United Kingdom (UK) Gross Domestic Product (GDP) data for August, beating expectations for a fourth month, give the Bank of England more room to raise rates and ease pressure on the Chancellor’s deficit-reduction plans.

USD/JPY is little changed on Friday but heads for its first weekly loss in five weeks amid a sharp decline in the US Dollar (USD). However, the Japanese Yen (JPY) finds only limited support as its fundamental backdrop remains fragile.

The British Pound (GBP) appreciates against a weak US Dollar (USD) on Friday as risk appetite improves, with global yields pulling back from highs, and investors reprice Federal Reserve’s (Fed) monetary tightening bets.

Societe Generale’s Kenneth Broux highlights that USD/BRL has formed a higher low and is staging a short-term bounce toward its 200‑day moving average near 5.14.

Nordea strategists note EUR/USD has already hit its H1 2027 target of 1.12 and now expect further US Dollar (USD) strength versus the Euro (EUR).

Commerzbank’s Volkmar Baur describes a double bind for the New Zealand Dollar as rising monthly price indices signal higher CPI, while electronic card data show stagnating retail spending and likely negative real consumption. With markets pricing an 80% chance of a Reserve Bank of New Zealand rate hike in two weeks, he remains cautious and flags next week’s CPI as crucial.

The Euro (EUR) extends its recovery move to near 1.1250 against the US Dollar (USD) in the European trading session on Friday. The major currency pair started recovering after posting a fresh 16-month low near 1.1113 on Wednesday.

The USD/CHF pair attracts some follow-through selling for the second straight day on Friday, extending this week's retracement slide from the 0.8400 neighborhood, or the highest since May 2025.

United Overseas Bank (UOB) analysts Quek Ser Leang and Lee Sue Ann see USD/JPY in a near-term range, expecting the Dollar to trade between 157.80 and 158.50 in the 24-hour view. For the 1–3 weeks horizon, they maintain a broader 157.50–159.05 range. Over 1–3 months, they highlight building downward momentum that points to further USD/JPY weakness, though reaching the January low at 152.08 is still uncertain.

The New Zealand Dollar (NZD) is showing the strongest performance among the major currencies on Friday, and rallies 0.8% against the US Dollar (USD) to hit three-week highs at 0.5667 at the time of writing.

Commerzbank analysts highlight that the Reserve Bank of India clarified recent derivative restrictions, limiting them to hedging FX risk rather than market-making. The measures target excessive speculation in USD/INR, which had returned near record levels.

The British Pound (GBP) trades 0.4% higher at around 210.50 against the Japanese Yen (JPY) during the European trading session on Friday.

Here is what you need to know on Friday, October 16:

The Canadian Dollar (CAD) maintains its firm tone on Friday, buoyed by elevated Oil prices, while the US Dollar (USD) struggles amid lower US Treasury yields and dovish comments by Fed speakers.

The GBP/USD pair attracts some follow-through buyers for the second straight day on Friday, recovering further from the year-to-date low, around the 1.3135 region, touched earlier this week.

ING’s Chris Turner highlights that Eurozone CPI is set to be confirmed at 3.8%, well above the ECB’s target, with markets still digesting hawkish inflation forecasts and pricing around 75bp of further tightening. He sees EUR/USD supported by US tech unease and potentially extending a consolidative move toward 1.1340/50, though he expects USD/CHF to outperform on any deeper US equity correction.

The Australian Dollar (AUD) is up 0.41% higher at around 0.6950 against the US Dollar (USD) during the European trading session on Friday. The Aussie pair strengthens as the market sentiment turns risk-on due to United States (US) Treasury Yields remaining under pressure this week.

MUFG’s Michael Wan reports that Bank of Japan (BoJ) Board Member Junko Koeda has strengthened the case for further policy tightening. Koeda emphasized upside price risks, still-accommodative financial conditions and judged the neutral rate to be well above 1%.