Across 20–24 Oct the market painted a theme of expectations for Fed easing vs. central banks staying put. U.S. data softened late in the week — notably September CPI printed a touch below consensus on 24 Oct — which weakened the dollar into Friday and reinforced market pricing for an imminent Fed cut at the October FOMC. At the same time, ECB messaging stayed broadly ‘on hold’ and Japan’s policy stance left the yen vulnerable, so currency moves were dominated by shifts in U.S. rate expectations and relative yield dynamics.

When markets push up the odds of Fed cuts, the dollar tends to ease — which helps EURUSD and undermines USDJPY only to the extent Japan’s yields move or BoJ signals change. Conversely, geopolitical/risk moves or a widening U.S.–Japan yield gap keep the dollar bid and lift USDJPY even if EURUSD drifts modestly. This week we saw both dynamics: softer U.S. inflation nudged the dollar lower into Friday, but yield differentials (and Japan’s still-loose policy) supported USDJPY earlier in the week. 

With the dollar at the center of these cross-currents, it’s time to look more closely at how each pair — EURUSD and USDJPY — is positioning within this broader narrative.