FX Daily analysis
Dollar softens broadly as US 2-year yield drops 3bp, CAD and MXN diverge
The dollar index fell -0.25% as the US 2-year yield gave back 3bp on the day and 14bp on the week. USD/CAD and USD/MXN moved in opposite directions, with CAD at its one-month low and MXN at its one-month and 52-week high.
Takeaways
- The dollar index fell -0.25% on the day but remains up +0.32% on the week and +0.48% on the month.
- USD/CAD sits at its one-month low of 1.39896, while USD/MXN sits at its one-month and 52-week high of 18.84271.
- USD/KRW rose +0.91% on the day and the won is now down -7.26% against the dollar on a year-to-date basis.
- The US 2-year yield fell 3bp on the day and 14bp on the week, with the dollar index's 60-day correlation to that yield at 0.38.
The dollar
The dollar index closed at 101.933, down -0.25% on the day. It is still higher on the week, +0.32%, and higher on the month, +0.48%. The index sits 0.63% below its one-month and 52-week high of 102.58 and 0.32% above its one-month low of 101.61.
The US 2-year yield fell 3bp to 4.67%, extending a 14bp decline over the week and a 25bp decline over the month. The 10-year rose 6bp on the day to 5.05% but is down 8bp on the week and 19bp on the month. The dollar index's 60-day correlation with the 2-year's daily change is 0.38, consistent with the index softening alongside the front end on this session.
G10 majors
USD/CAD led the majors, falling -0.431% to 1.39896, its one-month low, and is now down -0.373% on the week and -1.421% on the month. The pair sits exactly at its one-month low and 0.26% below its 200-day average of 1.39538. The Bank of Canada's rate stands at 2.25%, last cut 25bp on 2025-10-30, a differential of -175bp to the top of the Fed's range. USD/CAD's 60-day correlation with the US 2-year is -0.10, so the day's move ran against the modest yield decline rather than with it.
EUR/USD rose +0.447% to 1.11794, a reversal from its -0.492% weekly and -1.423% monthly losses. The pair closed near its 52-week low of 1.11297, now 0.44% above it, and 0.49% below its one-month high of 1.12347. The ECB deposit rate is 2.50%, last raised 25bp on 2026-09-16, for a differential of -150bp to the Fed's upper bound. The pair's correlation with the US 2-year is a low 0.11.
GBP/USD gained +0.526% to 1.33763, trimming its weekly loss to -0.144% while holding a +1.085% monthly gain. USD/CHF fell -0.603% to 0.8238, with the franc now up +1.265% against the dollar on the month. USD/JPY eased -0.204% to 157.67, keeping the yen's monthly change at -0.169% versus the dollar. NZD/USD was the weakest major on the day, down -0.767% to 0.56367, sitting 0.88% above its 52-week low. AUD/USD was little changed, +0.049%, holding at its one-month high of 0.70338.
Emerging markets
USD/KRW rose +0.911% to 1338.90002, its largest daily move for its volatility among the EM set, and is up +1.004% on the week even as it remains down -0.859% on the month. The pair sits 0.31% below its one-month high and 1.28% above its 52-week low of 1321.76001. USD/CNY fell -0.112% to 6.6605, a fresh one-month and 52-week low, extending a -0.261% weekly and -0.634% monthly decline. USD/INR was little changed on the day, +0.034%, but is up +0.952% on the week.
In Latin America and EMEA, USD/MXN rose +0.833% to 18.84271, a one-month and 52-week high, adding to a +0.878% weekly and +4.429% monthly advance. USD/BRL rose +0.647% to 5.3849, also a one-month high, after a +7.261% weekly move and a +3.498% monthly gain. USD/ZAR fell -0.145% to 16.6146 despite a +1.494% weekly rise. USD/TRY rose +0.173% to 49.8852, a fresh one-month and 52-week high.
Rate differentials and central banks
The Bank of Canada's policy rate is 2.25%, 175bp below the top of the Fed's range, after a 25bp cut on 2025-10-30. USD/CAD's fall to a one-month low came with a -0.10 correlation to the US 2-year on a 60-day basis, so the move did not track the front-end yield decline. Banco de Mexico holds at 6.50%, a 250bp differential in MXN's favor, yet USD/MXN rose to a fresh high with a -0.15 correlation to the 2-year, also running counter to the yield move.
The Bank of Korea's rate is 3.00%, last raised 25bp on 2026-08-27, 100bp below the Fed's top end. USD/KRW's correlation with the US 2-year is -0.18, and the pair rose even as the 2-year yield fell, a divergence from the pack's broader pattern. The ECB's 2.50% deposit rate, last moved 25bp on 2026-09-16, leaves EUR/USD 150bp disadvantaged to the Fed; the pair's 0.11 correlation to the 2-year is too low to describe the day's bounce as yield-driven.
The SNB's rate is 0.00%, last published 2026-10-27 with no decision date given, a 400bp gap to the Fed, the widest among the G10 set shown. USD/CHF's -0.11 correlation to the 2-year means the franc's gain also moved independent of the front-end. The Fed's own rate stands at 4.00% as the upper bound of its target range, last raised 25bp on 2026-09-17, with the US 2-year's 3bp daily and 14bp weekly declines sitting behind the dollar index's own retreat, given the index's 0.38 correlation to that yield.
Levels that matter
- USD/CAD: 1.39896, at its one-month low, 0.74% below its 50-day average of 1.40926 and 0.26% above its 200-day average of 1.39538.
- USD/MXN: 18.84271, at its one-month and 52-week high, 3.48% above its one-month low of 18.1867.
- USD/KRW: 1338.90002, 0.31% below its one-month high of 1342.98999 and 1.28% above its 52-week low of 1321.76001.
- NZD/USD: 0.56367, 0.67% below its 50-day average of 0.56745 and 0.88% above its 52-week low of 0.55869.
- EUR/USD: 1.11794, 0.49% below its one-month high of 1.12347 and 0.44% above its 52-week low of 1.11297.
- USD/JPY: 157.67, 0.54% below its one-month high of 158.52299 and 0.29% above its 50-day average of 157.21088.
- USD/CHF: 0.8238, 0.25% below its 50-day average of 0.82585 and 0.48% above its one-month low of 0.81981.
- USD/TRY: 49.8852, at its one-month and 52-week high, 1.14% above its one-month low of 49.3184.
Every pair
| Pair | Last | Day | Week | Month | Year to date | Policy rate |
|---|---|---|---|---|---|---|
| The dollar | ||||||
| Dollar indexindex | 101.93 | −0.25% | +0.32% | +0.48% | +3.57% | n/a |
| G10 majors | ||||||
| EUR/USDUSD per EUR | 1.1179 | +0.45% | −0.49% | −1.42% | −4.86% | 2.50%ECB, −150bp vs Fed |
| USD/JPYJPY per USD | 157.67 | −0.20% | −0.29% | +0.17% | +0.60% | 1.25%BoJ, −275bp vs Fed |
| GBP/USDUSD per GBP | 1.3376 | +0.53% | −0.14% | +1.08% | −0.72% | 3.75%BoE, −25bp vs Fed |
| USD/CHFCHF per USD | 0.8238 | −0.60% | −0.02% | −1.25% | +4.01% | 0.00%SNB, −400bp vs Fed |
| USD/CADCAD per USD | 1.3990 | −0.43% | −0.37% | −1.42% | +2.00% | 2.25%BoC, −175bp vs Fed |
| AUD/USDUSD per AUD | 0.7034 | +0.05% | +0.06% | +0.64% | +5.32% | 4.60%RBA, +60bp vs Fed |
| NZD/USDUSD per NZD | 0.5637 | −0.77% | −1.20% | −0.07% | −2.11% | 2.75%RBNZ, −125bp vs Fed |
| Emerging markets | ||||||
| USD/CNYCNY per USD | 6.6605 | −0.11% | −0.26% | −0.63% | −4.80% | 3.00%PBoC, −100bp vs Fed |
| USD/MXNMXN per USD | 18.8427 | +0.83% | +0.88% | +4.43% | +4.77% | 6.50%Banxico, +250bp vs Fed |
| USD/BRLBRL per USD | 5.3849 | +0.65% | +7.26% | +3.50% | −2.39% | 13.75%BCB, +975bp vs Fed |
| USD/INRINR per USD | 95.210 | +0.03% | +0.95% | −0.88% | +5.83% | 5.50%RBI, +150bp vs Fed |
| USD/KRWKRW per USD | 1,338.90 | +0.91% | +1.00% | −0.86% | −7.25% | 3.00%BoK, −100bp vs Fed |
| USD/ZARZAR per USD | 16.6146 | −0.14% | +1.49% | +1.36% | +0.38% | 7.25%SARB, +325bp vs Fed |
| USD/TRYTRY per USD | 49.8852 | +0.17% | +0.53% | +1.79% | +16.03% | 36.00%CBRT, +3,200bp 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.