The Canadian Dollar (CAD) pares previous daily losses on Monday, as the US Dollar (USD) pulls back from multi-month highs against most peers, with market concerns about higher global debt yields keeping investors away from risk.

The British Pound (GBP) claws back some of its early losses against the US Dollar (USD), but is still 0.15% down to near 1.3220 during the European trading session on Monday. The GBP/USD pair recovers slightly as the US Dollar Index retreats after hitting a fresh annual high near 102.53.

DBS strategist Philip Wee explains that EUR/USD’s four-week decline reflects shifting risk balances, with renewed Federal Reserve (Fed) tightening overshadowing the European Central Bank (ECB) and France’s fiscal issues overshadowing US concerns.

The Swiss Franc (CHF) has retraced previous losses on Monday and trades practically flat against the US Dollar (USD), hardly affected by the bond market turmoil that has crushed investors’ appètite for risk.

ING’s Chris Turner says Brazilian assets are set to rally after Sunday’s presidential vote, where Flavio Bolsonaro secured 47% versus President Lula’s 45%. He expects markets to assume remaining votes lean Bolsonaro, sees currency and bonds benefiting from his fiscal austerity and deregulation agenda, and projects USD/BRL opening near 5.10, with a return to 4.90 seen as too aggressive.

The USD/JPY pair struggles to capitalize on Friday's bounce from sub-157.00 levels, touched in reaction to the weak US Nonfarm Payrolls (NFP) report, and seesaws between tepid gains/minor losses through the first half of the European session.

Eurozone Producer Price Index (YoY) climbed from previous 5.8% to 8.2% in August

Eurozone Producer Price Index (MoM) meets expectations (1.9%) in August

The Euro (EUR) maintains its bearish tone against the US Dollar (USD) on Monday, following a string of mixed Services Activity figures and weak Investor Confidence data, with concerns about France's fiscal health weighing heavily.

The Australian Dollar (AUD) bounces back strongly against the Japanese Yen (JPY) and flattens at around 109.80 during the European trading session on Monday.

Eurozone’s Sentix Investor Confidence data, a key indicator of Investor morale, comes in lower at 2.7 in October from 5.1 in September.

The EUR/GBP cross attracts sellers for the seventh straight day and drops back closer to the year-to-date low, around the 0.8460-0.8455 region, at the start of a new week.

Eurozone Sentix Investor Confidence dipped from previous 5.1 to 2.7 in October

United Overseas Bank (UOB) strategist Quek Ser Leang observes USD/JPY fluctuated between 156.94 and 158.21, closing at 157.83, with intraday trading expected inside 157.10–158.10. Over 1–3 weeks, he now favours a broad consolidation between 156.35 and 158.70 rather than deeper pullbacks. On a 1–3 month horizon, however, he still flags rapid downside momentum that could drive further weakness toward the January low at 152.08.

EUR/CAD has pared its recent gains from the previous trading day, hovering around 1.5970 during European hours on Monday. The currency cross depreciates as the Euro (EUR) remains under pressure following the release of Final HCOB Purchasing Managers’ Index (PMI) data from Germany and the Eurozone.

Here is what you need to know on Monday, October 5:

The New Zealand Dollar (NZD) extends its decline as the safe-haven  US Dollar (USD) maintains its bullish tone, with investors wary of risk, amid the worsening bond market turmoil.

MUFG’s Lee Hardman highlights that Euro (EUR) weakness at the start of the week reflects mounting concerns over destabilizing financial conditions in the Euro-zone, triggered by a sharp sell-off in French government bonds.

Eurozone HCOB Services PMI meets expectations (53) in September

Eurozone HCOB Composite PMI meets forecasts (53.1) in September

Germany HCOB Services PMI meets expectations (52.9) in September

The British Pound (GBP) slumps 0.3% to near 208.40 in the European trade on Monday after a flat opening at around 209.10.

AUD/USD inches lower after registering modest gains in the previous day, trading around 0.6940 during European hours on Monday. The pair remains subdued as the US Dollar (USD) gains ground on rising safe-haven demand, driven primarily by deteriorating geopolitical conditions in the Middle East.

Silver (XAG/USD) trades above $61.30 on Monday’s early European session, after bouncing from two-month lows around $59.70 on Friday.

The USD/CAD pair gathers strength to around 1.4280 during the early European trading hours on Monday. Oil prices fall as rising crude exports from the Middle East and G7 nations' release of oil add to supplies, weighing on the commodity-linked Canadian Dollar (CAD) against the US Dollar (USD).

The Euro (EUR) underperforms its major currency peers at the start of the week, weighed down by increased fiscal risks in France amid surging costs on public finances and political instability.

Commerzbank’s Thu Lan Nguyen argues that growing concerns over France’s public debt sustainability are now weighing on the Euro (EUR), after previously leaving the currency largely untouched despite bond market turmoil.

The Japanese Yen (JPY) nurses marginal losses against the US Dollar (USD) on Monday but remains trading within previous ranges, with downside attempts limited as Japanese Prime Minister Sanae Takaichi pledged to keep public debt under control.

The British pound (GBP) is down 0.26% to near 1.3200 against the US Dollar (USD) during the early European trading session on Monday.

The Indian Rupee (INR) opens marginally higher against the US Dollar (USD) at the start of the Reserve Bank of India’s (RBI) monetary policy week.