Markets Driven by Political Risks and Safe-Haven Surge (10.14.2025)

The euro held near $1.16 as France faced a key budget vote amid political divisions, while easing U.S.–China tensions provided limited relief. 

The yen weakened toward 152.3 after coalition rifts clouded Japan’s political outlook. Gold soared to a record $4,150 as investors sought safety amid renewed tariff threats and the ongoing U.S. shutdown. Meanwhile, sterling slipped ahead of the U.K. budget announcement, and silver surged above $53, supported by global unrest, supply tightness, and rising Fed cut expectations.

Euro Holds as France Faces Budget Test

The euro hovered near $1.1600, close to last week’s low, as investors weighed France’s political uncertainty and U.S.–China trade tensions. French Prime Minister Sebastien Lecornu, reappointed after briefly resigning, faces a tight deadline to pass the draft budget, while most lawmakers oppose dissolving parliament. In the U.S., President Trump softened his stance after earlier threatening steep tariffs on China.

Technically, 1.1550 is the key support, while resistance is seen at 1.1630.

Yen Slides as Coalition Rift Clouds Outlook

The yen slipped to around 152.40 per dollar, extending losses amid rising political uncertainty after Komeito’s exit from the ruling coalition cast doubt on Sanae Takaichi’s leadership prospects. Finance Minister Kato said inflation is now the main concern and warned against sharp currency moves. A stronger dollar, supported by easing U.S.–China tensions and an upcoming Trump–Xi meeting, added pressure.

Resistance is at 153.20, while support holds at 151.10.

Gold Surges as U.S.–China Risks Mount

Gold surged to a record $4,180 per ounce as investors sought safety amid U.S.–China trade tensions and rising Fed rate-cut bets. Trump’s new tariff and export threats prompted Beijing to signal countermeasures. The ongoing U.S. government shutdown also weighed on sentiment, with Treasury Secretary Bessent warning of economic strain. Markets now await Fed Chair Powell’s comments on the policy outlook.

From a technical perspective, support is around 4090, and resistance is at 4180.

GBP Drops Before Reeves’ Budget Address

The pound fell to $1.3280 as a stronger U.S. dollar and caution ahead of the U.K.’s November budget weighed on sentiment. Finance Minister Rachel Reeves is expected to stress fiscal discipline with possible tax hikes, following the earlier £25 billion rise in employer contributions. Analysts project modest growth and 4% inflation for 2025, while traders await U.K. labor and GDP data before the November 6 BoE meeting. Dollar strength persisted as Trump softened his stance on China tariffs.

From a technical perspective, support is around 1.3230, and resistance is at 1.3485.

Silver Soars Above $53 on Safe-Haven Rush

Silver jumped over 4% to above $53.60 per ounce, marking a record high as U.S.–China trade tensions, global political unrest, and expectations of Fed rate cuts spurred safe-haven demand. Trump’s 100% tariff threat was followed by openness to talks with Xi, while the U.S. shutdown, France’s turmoil, and Japan’s leadership uncertainty added support. Tight London supply and dovish Fed expectations further fueled the rally.

From a technical perspective, resistance is observed at 52.20, while support is located at 50.85.