US Dollar Holds Steady as French Unrest Weighs on Euro

The US dollar opened higher in early Asian trading on Monday, moving away from levels near its one-month low. The euro faced downward pressure driven by violent unrest in France.

Euro Slips Amid French Protests

The single currency fell 0.1% to $1.1225 at the start of Asia sessions. This decline helped stabilize the greenback, which traded at 101.83. The euro holds the largest weight in the dollar index.

French President Emmanuel Macron condemned "shocking" scenes of violence linked to cost-of-living protests. He addressed the nation via television on Sunday, following the worst days of civil disturbance in years. Macron stated that France is paying for a conflict it did not engage in, describing the vandalism as "terrifying."

The president announced that the prime minister will chair an emergency committee starting Monday. This body will assess aid for merchants, artisans, and business owners affected by riots. Macron assured these groups they would not be left alone to face losses.

Market Reaction and Currency Dynamics

Kieran Williams, head of Asia FX strategy at Intouch Capital Markets in London, noted that early-week disturbances impact the euro primarily through French bonds rather than direct effects. The dollar held steady against the yen at 158. Bank of Japan Governor Kazuo Ueda said core inflation is "very close" to the central bank's 2% target.

In offshore trading, the dollar settled at 6.6842 yuan ahead of China’s third-quarter GDP release. Analysts expected the Chinese economy to accelerate slightly after hitting a three-year low. Official data showed China grew 4.5% in Q3 2026, beating forecasts due to strong AI product exports. Despite this, the world’s second-largest economy faces pressure from weak domestic spending and high energy costs.

Asian Emerging Markets and Crypto Moves

Attention focused on the Indonesian rupiah after MSCI threatened last week to downgrade the country’s stock market to "standalone" status. This warning caused equities to plunge 11.6%. The rupiah touched a nearly three-month low on Friday, closing at 18,000 per dollar.

The Australian dollar rose 0.3% to $0.6965. The New Zealand dollar remained stable at $0.5656, while the British pound held at $1.3329. In cryptocurrency markets, Bitcoin gained 1.4% to $82,067.66. Ether climbed 3.0% to $2,420.22.

Federal Reserve Rate Expectations

CME Group’s FedWatch tool indicated futures price an 84% probability that the Federal Reserve will hold interest rates unchanged. The two-day meeting begins October 28. This outlook showed little change from Friday. Williams observed that positions are likely to remain limited before the Fed meeting on October 28 and the European Central Bank gathering on October 29. He added that headline risks from France remain elevated.