Measured counsel for
the modern portfolio.

Europe sets the tone this Monday, with the euro down 0.48% at $1.12004 as French fiscal concerns and political uncertainty in France and Spain weigh on sentiment. Reports of a 17-month low underline the pressure, while fears of contagion suggest markets are looking beyond France’s budget alone. The currency moves point to a distinctly European problem rather than a uniform flight into dollars. EUR/GBP is down 0.37% at 0.84673, with sterling losing just 0.09% against the dollar to $1.32278. That relative resilience should not be mistaken for outright confidence in the pound.

The US rate backdrop offers a useful counterpoint. Expectations of an October Federal Reserve increase have eased, yet the euro’s decline has continued. For now, European political risk appears to be outweighing that softer US rate impulse in EUR/USD. Elsewhere, the dollar is down 0.11% against the yen at ¥157.6755, up only 0.02% against the Swiss franc at CHF0.82889 and 0.06% against the Canadian dollar at C$1.42589. These are modest moves beside the euro’s loss, limiting the case for describing this as a broad dollar surge.

For Gulf clients, the oil signals are unusually mixed. Saudi Arabia has unexpectedly cut November selling prices to Asia to six-year lows, while OPEC+ has agreed to leave production steady. Against that, Houthi claims of a strike on an Aramco site and intensifying fighting in Yemen keep infrastructure risk in focus. The Joint Ministerial Monitoring Committee’s call to protect energy infrastructure reinforces that concern. Reports of oil gains following the attacks sit alongside pressure from diesel releases and weaker distillate margins, leaving no simple directional message. UAE and Saudi non-oil activity is reported to be maintaining strong growth despite the Iran war. USD/AED is unchanged at 3.67314, while gold is up 0.66% at $4,167.789, consistent with some demand for protection.

In Asia, RBI intervention is cushioning the rupee against dollar strength and persistent outflows, while broadening inflation has encouraged expectations of an Indian rate increase. A poll points to a possible quarter-point rise in October, not a settled decision. In Japan, a former Bank of Japan policymaker’s call to end low rates adds to the policy debate. Australia’s dollar is slightly firmer at $0.69597, up 0.07%, despite headlines highlighting Middle East tensions and cooler inflation.

Today, watch whether French budget concerns spread further through European currencies, and whether sterling retains its relative advantage. For the Gulf, confirmation of the reported infrastructure strike matters more than the claims alone. Oil’s response to Saudi pricing and supply-risk news, alongside shifts in Fed rate expectations, should help distinguish euro-specific stress from wider defensive positioning.