Last week the dominant theme was dollar repricing on rising Fed-cut expectations, with that single macro story transmitting through FX: EUR/USD got a lift as the euro caught a softer dollar tailwind and improving European inflation data; USD/JPY oscillated as risk flows and BoJ/FX-monitoring headlines interacted with moves in U.S. yields; the DXY ended the week a touch softer inside a choppy range as markets priced more near-term easing. These moves were amplified by headline risk (tariff/geopolitics) and U.S. data/calendar uncertainty from the government shutdown.

The DXY traded in a roughly 98–99 range but showed an overall bias to soften as markets increased the odds of Fed easing. Traders reacted to Fed officials signalling preparedness to cut if growth/labour softens, and to delayed/missing U.S. data because of the shutdown — both factors reduced the near-term dollar bid. Price action was choppy day-to-day but the narrative was one of easing expectations denting the dollar.

EUR/USD rallied at points as the euro picked up the mechanical upside from a softer dollar. That move was not purely risk-on: euro-area inflation ticked up in September (Eurostat reported a 2.2% annual rate), which gives the ECB cover relative to markets that were otherwise pricing aggressive Fed cuts. In short: euro gains were partly dollar-driven and partly supported by firmer euro-area inflation prints.

USD/JPY swung widely (intra-week roughly mid-149s to low-152s) as U.S. real yields and risk flows fought for control. When dollar and yields eased on Fed-cut bets and shutdown uncertainty, the yen found support (JPY strengthened). However, safe-haven flows on specific risk spikes and persistent carry/BoJ guidance kept the overall range wide. Japan’s officials also signalled heightened sensitivity to disorderly FX moves — adding a political overlay that capped excess moves.

How the pieces fit: The central causal chain last week was: Fed-cut talk & data delays → lower U.S. real yields / softer dollar → EUR/USD higher and USD/JPY pressured. Overlay risks (tariffs, geopolitics, central-bank/official comments) created reversals and the wide intra-week ranges.