Markets Steady as France’s Downgrade Weighs on Optimism (10.21.2025)

The euro held above $1.165 on Tuesday, resilient despite France’s S&P downgrade to A+ amid improved global sentiment and a weaker U.S. dollar. 

The yen slipped toward 150.5 as risk appetite strengthened before Japan’s leadership vote, while gold hovered near record highs above $4,340 on renewed Fed rate-cut expectations. The pound stayed firm after a modest UK GDP rebound, and silver steadied below $52.40 after profit-taking paused its sharp rally.

Euro Steady Above $1.165 Despite France’s S&P Cut

The euro held slightly above $1.165, near its highest since October 6, as investors weighed France’s S&P downgrade against a better global risk mood. S&P cut France’s rating from AA- to A+, citing difficulties in controlling spending and fiscal uncertainty despite the 2026 budget plan.

Technically, 1.1600 is the key support, while resistance is seen at 1.1710.

Yen Falls as Risk Appetite Improves

The yen slipped toward 150.5 per dollar, extending losses ahead of Japan’s leadership vote to choose the next prime minister. Traders also awaited the BOJ meeting, where rates are expected to stay unchanged. Improved global risk sentiment and easing US-China tensions reduced demand for the safe-haven currency.

Resistance is at 151.60, while support holds at 149.60.

Gold Firms as Rate-Cut Bets, Uncertainty Persist

Gold held near a record high around $4,340, supported by safe-haven demand and Fed rate-cut expectations. The ongoing U.S. government shutdown added uncertainty, though adviser Kevin Hassett signaled a possible deal this week. Investors also awaited U.S.-China talks ahead of the Trump–Xi summit, while markets priced in 25 bps Fed cuts in both October and December amid delayed CPI data.

From a technical perspective, support is around 4318, and resistance is at 4400.

GBP Steady After UK GDP Rebound in August

The British pound held steady above $1.34 after the UK’s latest GDP data met expectations, providing some relief to Finance Minister Rachel Reeves ahead of the November 26 budget announcement. The economy grew 0.1% in August, rebounding from a similar decline in July. The increase was supported by manufacturing gains, while the services sector remained flat for a second month and construction activity declined.

From a technical perspective, support is around 1.3370, and resistance is at 1.3484.

Silver Steadies Below $52.40 After Sharp Selloff

Silver traded just below $52.40 per ounce on Tuesday, steadying after a more than 4% decline in the prior session as investors booked profits following a record-breaking rally. Improved global risk sentiment, aided by easing US-China trade tensions, weighed on safe-haven demand. Traders now look ahead to key US inflation data later this week after the recent delay caused by the government shutdown.

From a technical perspective, resistance is observed at 52.60, while support is located at 51.20.