FX Daily analysis
Dollar broad-based gains as euro breaks to a year low, real slides
The dollar index rose +0.40% to 102.365, its highest close of the month. The story was the real, up +7.885% against the dollar on the day, with the euro also falling to a fresh 52-week low.
Takeaways
- USD/BRL's +7.885% daily rise is the largest move in the pack by a wide margin, at a z-score of 8.57.
- EUR/USD closed at 1.11321, its low for the month and the year, down -0.76% on the day and -2.16% over the month.
- USD/JPY rose +0.73% to 157.98 even as the US 2-year yield fell 1bp, a move against the recent correlation.
- The dollar index sits at the top of its one-month range, +0.21% from the high and 1.18 standard deviations above its recent norm.
The dollar
The dollar index closed at 102.365, up +0.397% on the day, +0.624% on the week and +1.151% on the month. That puts it 0.21% below the one-month and 52-week high of 102.58, and well clear of both the 50-day average at 101.1859 and the 200-day at 100.04328. The daily move is 1.18 standard deviations against the past year, a stretched print by recent standards.
The move came against a US front end that itself eased. The 2-year yield fell 1bp on the day, 9bp on the week and 19bp on the month, to 4.68%. The 10-year held flat on the day, down 15bp on the week and 18bp on the month, to 5.00%. The dollar index's 60-day correlation with the 2-year is 0.36, positive but not tight, and today's session ran against it: yields fell, the dollar rose.
G10 majors
EUR/USD led the majors lower, down -0.761% on the day to 1.11321, now at both its one-month and 52-week low. The week's move was -0.746% and the month -2.161%, leaving the pair 2.18 standard deviations beyond its recent norm, the sharpest in the G10 set. The pair sits 1.09% below its one-month high of 1.12535 with no averages nearby.
USD/JPY rose +0.731% on the day to 157.97701, a gain for the dollar against the yen even as the 2-year yield fell, a pairing inconsistent with the pair's own weak correlation to that yield (-0.11). The weekly move was -0.344% and the month +0.326%. The pair closed 0.35% below its one-month high and 0.58% above its 50-day average of 157.05326.
GBP/USD fell -0.535% to 1.33062, in line with the broader dollar bid, though the week was roughly flat at -0.017% and the month still positive at +0.581%. USD/CHF rose +0.613% on the day, taking it to 0.82888 and 0.63% from its one-month high. USD/CAD added +0.268% to 1.40501. Among the dollar-bloc currencies, AUD/USD was essentially unchanged on the day at +0.017%, holding at its one-month high of 0.70309, while NZD/USD fell -0.328% to 0.56831, sitting on its 50-day average.
Emerging markets
In Asia, USD/CNY fell -0.186% to 6.6655, a fresh one-month and 52-week low for the pair, extending a -0.38% weekly and -0.705% monthly decline, the yuan's strongest month in the set at +0.71% on its own terms. USD/KRW rose +0.36% on the day to 1326.52, trimming a -2.066% monthly fall that has taken the pair to within 0.36% of its 52-week low. USD/INR rose +0.176% to 95.105, with the rupee still up +0.718% on the month.
The real dominated the Latin America and EMEA set. USD/BRL rose +7.885% on the day to 5.3513, a fresh one-month and 52-week high for the pair and a daily z-score of 8.57, by far the most extreme move in the pack. The week's gain was +6.24% and the month +3.158%. USD/MXN fell -0.206% on the day to 18.6804 but is up +5.25% on the month, now 0.22% below its one-month high. USD/ZAR rose +0.08% to 16.63844, a one-month high, with the rand down -1.785% on the month. USD/TRY rose +0.169% to a fresh one-month and 52-week high of 49.8228, extending a steady lira decline that now stands at -1.709% on the month.
Rate differentials and central banks
The rate differential backdrop was mixed against the day's moves. The Fed's range sits at 3.75-4.00%. The ECB's deposit rate is 2.50% as of 2026-10-27, last moved +25bp on 2026-09-16, a gap of -150bp to the top of the Fed's range; that gap was already in place before today's euro slide, so the move cannot be pinned on a change in the differential. The BoJ's rate is 1.25% as of 2026-10-20, -275bp to the Fed, unchanged since its last +25bp move on 2026-09-24. USD/JPY's rise came with the 2-year yield falling, a combination that sits against the pair's own 60-day correlation of -0.11, itself a weak reading, so the move cannot be read as yield-driven either.
The BoE's rate is 3.75% as of 2026-10-19, -25bp to the Fed, unchanged since a -25bp cut on 2025-12-18. GBP/USD's -0.535% fall on the day came with a 60-day correlation to the 2-year of just 0.01, effectively no relationship, consistent with a move that tracked the broader dollar bid rather than any shift in the UK-US gap.
Brazil's BCB rate is 13.75% as of 2026-10-20, last cut -25bp on 2026-09-17, leaving a +975bp gap to the Fed, the widest in the pack. That gap was already wide before today. USD/BRL's correlation to the 2-year is a slim 0.07, and the yield itself fell on the day, so the move cannot be explained by the US rate backdrop. The pack gives no data point from Brazil itself to explain the size of the move; what is clear is that the real sold off against a dollar that was broadly firm but not firm enough elsewhere to produce a comparable move.
Levels that matter
- USD/BRL: 5.3513, below the 52-week high of 5.59 (+4.46% away) and above the 50-day average of 5.10579 (-4.59% away).
- EUR/USD: 1.11321, at both the one-month and 52-week low, with the one-month high at 1.12535 (+1.09% away).
- USD/JPY: 157.97701, below the one-month high of 158.52299 (+0.35% away) and above the 50-day average of 157.05326 (-0.58% away).
- GBP/USD: 1.33062, above the 50-day average of 1.33276 (+0.16% away) and below the one-month low of 1.32098 (-0.72% away).
- Dollar index: 102.365, below the one-month and 52-week high of 102.58 (+0.21% away) and above the one-month low of 101.61 (-0.74% away).
- USD/CHF: 0.82888, below the one-month high of 0.83409 (+0.63% away) and above the 50-day average of 0.82519 (-0.45% away).
- USD/CNY: 6.6655, at both the one-month and 52-week low, below the 50-day average of 6.69934 (+0.51% away).
- USD/TRY: 49.8228, at both the one-month and 52-week high, above the one-month low of 49.1956 (-1.26% away).
Every pair
| Pair | Last | Day | Week | Month | Year to date | Policy rate |
|---|---|---|---|---|---|---|
| The dollar | ||||||
| Dollar indexindex | 102.36 | +0.40% | +0.62% | +1.15% | +4.01% | n/a |
| G10 majors | ||||||
| EUR/USDUSD per EUR | 1.1132 | −0.76% | −0.75% | −2.16% | −5.26% | 2.50%ECB, −150bp vs Fed |
| USD/JPYJPY per USD | 157.98 | +0.73% | −0.34% | +0.33% | +0.80% | 1.25%BoJ, −275bp vs Fed |
| GBP/USDUSD per GBP | 1.3306 | −0.54% | −0.02% | +0.58% | −1.24% | 3.75%BoE, −25bp vs Fed |
| USD/CHFCHF per USD | 0.8289 | +0.61% | +0.25% | −0.10% | +4.65% | 0.00%SNB, −400bp vs Fed |
| USD/CADCAD per USD | 1.4050 | +0.27% | −0.39% | −0.74% | +2.44% | 2.25%BoC, −175bp vs Fed |
| AUD/USDUSD per AUD | 0.7031 | +0.02% | +0.69% | +0.31% | +5.28% | 4.60%RBA, +60bp vs Fed |
| NZD/USDUSD per NZD | 0.5683 | −0.33% | +0.31% | +0.56% | −1.30% | 2.75%RBNZ, −125bp vs Fed |
| Emerging markets | ||||||
| USD/CNYCNY per USD | 6.6655 | −0.19% | −0.38% | −0.70% | −4.72% | 3.00%PBoC, −100bp vs Fed |
| USD/MXNMXN per USD | 18.6804 | −0.21% | +1.47% | +5.25% | +3.87% | 6.50%Banxico, +250bp vs Fed |
| USD/BRLBRL per USD | 5.3513 | +7.88% | +6.24% | +3.16% | −3.00% | 13.75%BCB, +975bp vs Fed |
| USD/INRINR per USD | 95.105 | +0.18% | +0.12% | −0.71% | +5.72% | 5.50%RBI, +150bp vs Fed |
| USD/KRWKRW per USD | 1,326.52 | +0.36% | −0.26% | −2.07% | −8.11% | 3.00%BoK, −100bp vs Fed |
| USD/ZARZAR per USD | 16.6384 | +0.08% | +1.34% | +1.82% | +0.53% | 7.25%SARB, +325bp vs Fed |
| USD/TRYTRY per USD | 49.8228 | +0.17% | +0.52% | +1.74% | +15.88% | 37.00%CBRT, +3,300bp vs Fed |
Moves as each pair is quoted: a rise in USD/JPY is a stronger dollar, a rise in EUR/USD a stronger euro. Policy rates as the analysis had them on file, against the top of the Fed's range.
Sources
Exchange rates and the dollar index at the session close from Yahoo Finance; the Fed and ECB rates and Treasury yields from FRED. Every figure in this analysis was checked against the session's verified fact pack. The text was drafted with a language model from that fact pack; the methodology explains how.
For information only. Not investment advice.