The Forex market enters the week of October 5–11, 2026 with EUR/USD and GBP/USD sitting at the centre of several competing forces.

The US Dollar has recently benefited from high Treasury yields, geopolitical uncertainty and expectations that US interest rates could remain restrictive for longer. At the same time, softer US employment and inflation data have significantly reduced expectations of another Federal Reserve rate increase at the October meeting.

For EUR/USD, traders must also contend with a renewed inflation problem in the Eurozone, growing fiscal concerns in France and uncertainty over how aggressively the European Central Bank will respond to the latest energy shock.

GBP/USD faces a similar conflict. UK inflation risks have increased as energy prices rise, pushing markets towards expectations of further Bank of England tightening. Yet unusually high gilt yields and concerns about the UK fiscal position mean higher interest rates are not automatically positive for sterling.

The Myfxbook economic calendar includes several potentially important releases, particularly US ISM Services PMI, Federal Reserve speeches, German economic data, the FOMC meeting minutes, ECB monetary policy accounts, US jobless claims and University of Michigan consumer sentiment.

Outside the scheduled calendar, developments in the Strait of Hormuz, crude oil prices, French government finances and UK bond markets could be equally important.

EUR/USD and GBP/USD Start the Week Under Dollar Pressure

The background entering Monday is important.

EUR/USD has suffered four consecutive weekly declines, with the pair recently falling towards 1.1215, its lowest area since May 2025. GBP/USD has also weakened substantially, recently touching approximately 1.3193, its lowest level in around three months.

The broader US Dollar remains supported by elevated Treasury yields.

However, the interest-rate picture changed significantly following the September US employment report. Nonfarm payrolls increased by only 29,000, well below expectations around 90,000, while unemployment rose to 4.2%.

That report reduced expectations of another Fed hike in October.

The answer could determine whether EUR/USD and GBP/USD continue lower or attempt a meaningful recovery.

Monday, October 5: US ISM Services PMI Takes Centre Stage

Monday's most important scheduled release for EUR/USD and GBP/USD is the September ISM Services PMI.

The previous reading was approximately 55.4, with expectations centred close to 55.7.

The ISM Services PMI measures activity across the enormous US services sector. A reading above 50 indicates expansion, while a figure below 50 indicates contraction.

Its importance extends beyond the headline number. Forex traders should also watch:

• Services employment
• New orders
• Business activity
• Prices paid

The prices component may be particularly important this week because the Federal Reserve is dealing with inflation risks created partly by elevated energy prices.

A strong headline PMI combined with stubbornly high prices could revive speculation that the Fed may still need another interest-rate increase before the end of 2026.

That scenario would generally favour the Dollar.

Potential EUR/USD Reaction

A substantially stronger ISM report could push US Treasury yields higher and pressure EUR/USD back towards recent lows.

A weaker report would be more interesting.

After September payroll growth collapsed to just 29,000, another weak activity indicator could reinforce the argument that the US economy is losing momentum.

That could reduce Fed tightening expectations further and allow EUR/USD to recover.

Potential GBP/USD Reaction

GBP/USD faces the same Dollar sensitivity.

With relatively few major UK economic releases scheduled this week, changes in US rate expectations may dominate Cable.

This has already been visible recently. Sterling has remained close to a three-month low against the Dollar despite expectations that the Bank of England could raise rates again.

Monday's ECB Speakers Could Add Volatility to EUR/USD

Monday also contains several ECB appearances, including comments from Philip Lane, Isabel Schnabel and other ECB officials.

Normally, some of these speeches would rank below major economic data.

This week they deserve more attention.

September Eurozone inflation accelerated sharply to approximately 3.8% year-on-year, compared with 3.2% previously, with rising energy prices playing a major role.

That has restarted the debate over further ECB tightening.

Several financial institutions now expect another ECB rate rise in December, while markets have moved towards pricing a meaningful probability of additional tightening.

If ECB officials emphasise the need to prevent energy inflation from feeding into wages and services prices, EUR/USD could receive support.

If they argue the energy shock is temporary and monetary policy should remain cautious, the euro could struggle.

Tuesday, October 6: German Factory Orders and a Busy Federal Reserve Schedule

Germany begins Tuesday with August factory orders.

The previous monthly increase was around 2.5%, with the next reading expected to show a decline of approximately 0.9%.

German factory orders can be volatile, but they remain a useful indicator of future manufacturing demand in Europe's largest economy.

For EUR/USD, the significance is greater when the data strongly surprises expectations.

A deep contraction would reinforce concerns that the ECB is facing an uncomfortable combination of weak growth and elevated inflation.

That is particularly problematic because interest-rate increases designed to contain inflation could further damage industrial activity.

A strong upside surprise would reduce some of those concerns.

US Trade Balance and ADP Employment Data

Tuesday also brings the US trade balance and an ADP employment indicator.

Employment indicators will receive additional attention following the weak September payroll report.

Traders should avoid treating any single private-sector labour indicator as equivalent to the official nonfarm payroll report, but a further deterioration would strengthen the emerging labour-market slowdown narrative.

Fed Williams, Bowman and Logan

Tuesday also features several Federal Reserve officials, including John Williams, Michelle Bowman and Lorie Logan.

Their comments could be more important than many of the day's data releases.

The market has recently moved sharply between expectations of an October rate increase and an October pause.

Softer US inflation data recently caused expectations for an October hike to fall dramatically. The perceived probability reportedly dropped from around 70% to 37% following softer PCE inflation.

Wednesday, October 7: FOMC Minutes Could Be the Week's Main USD Event

Wednesday brings one of the week's headline events: the minutes of the September 15–16 Federal Open Market Committee meeting.

The Federal Reserve schedules the minutes for release on October 7.

The September Fed meeting itself was highly significant.

The Federal Reserve raised rates by 25 basis points and signalled that additional tightening could still be required.

The Dollar reacted strongly.

Following that decision, EUR/USD fell approximately 0.7% in one session, demonstrating how sensitive the pair remains to changing Federal Reserve policy expectations.

What Traders Should Look for in the Minutes

The most important question will be how strongly policymakers believed further rate increases would be required.

The minutes describe a meeting that took place before some of the latest softer employment and inflation data.

That distinction matters.

A very hawkish set of minutes could initially support the Dollar, but traders may question whether those views remain valid following the weak September payroll report.

EUR/USD Scenario

Hawkish minutes plus high Treasury yields could renew selling pressure towards recent EUR/USD lows.

Dovish divisions inside the committee could trigger a Dollar pullback and open the door to a EUR/USD recovery.

GBP/USD Scenario

GBP/USD could react even more strongly if US yields move sharply.

With little major domestic UK data this week, Federal Reserve repricing could remain Cable's biggest short-term driver.

Traders wanting to follow developments directly can monitor the Federal Reserve's official monetary policy releases .

Thursday, October 8: ECB Accounts Meet US Jobless Claims

Thursday could produce a two-stage move in EUR/USD.

The first major event is the release of the ECB Monetary Policy Meeting Accounts.

These accounts provide more detail about the Governing Council's discussion and can reveal disagreements that were not obvious during the original policy announcement.

Traders can monitor the ECB's official monetary policy accounts .

The ECB raised rates by 25 basis points in September as policymakers responded to renewed energy-driven inflation.

Interestingly, the euro initially fell after that increase rather than rallying.

If the October accounts reveal strong concern about persistent inflation and support for further tightening, EUR/USD could strengthen.

If officials appear divided or concerned about economic weakness and financial stress, the opposite could occur.

US Initial Jobless Claims: Labour Market Confirmation

Later Thursday, attention shifts back to the United States.

• Initial jobless claims: approximately 197,000 previously, with around 195,000 expected
• Continuing claims: approximately 1.701 million, with around 1.710 million expected
• Four-week average: approximately 200,000

Weekly claims normally produce a smaller Forex reaction than nonfarm payrolls.

This week could be different because the market is trying to determine whether September's weak jobs report was an isolated disappointment or the beginning of a broader labour-market deterioration.

A sharp rise in claims could push Treasury yields lower and weaken the Dollar.

That would generally be supportive for both EUR/USD and GBP/USD.

Friday, October 9: Michigan Consumer Sentiment and Inflation Expectations

Friday's major US release is the preliminary University of Michigan Consumer Sentiment Index for October.

The previous sentiment reading is around 48.1, with expectations close to similar levels.

Consumer sentiment matters because household spending represents a large part of US economic activity.

However, traders should also pay close attention to the survey's inflation expectations.

Five-year inflation expectations were previously around 3.4%, with the next reading expected near 3.5%.

With oil above $100 during parts of the recent geopolitical crisis, households are seeing higher fuel costs directly.

If long-term inflation expectations rise significantly, the Federal Reserve may find it harder to justify a prolonged pause.

That could lift yields and strengthen the Dollar.

A fall in sentiment combined with stable or declining inflation expectations would be more supportive of the view that monetary tightening should stop.

That could help EUR/USD and GBP/USD into the end of the week.

The Event That Isn't Really on the Calendar: Strait of Hormuz

The biggest threat to any neat economic-calendar forecast is the Middle East.

Iran stated on October 4 that the Strait of Hormuz would not reopen until specific conditions are met, keeping one of the world's most important energy shipping routes at the centre of market risk.

This matters enormously for Forex.

Brent crude has recently traded above $100 per barrel, increasing inflation risks across energy-importing economies.

Why This Matters for EUR/USD

Europe is highly sensitive to imported energy prices.

Higher oil and gas prices can raise Eurozone inflation, encouraging ECB tightening.

Initially that might sound bullish for the euro.

The problem is that expensive energy also damages household purchasing power, industrial competitiveness and economic growth.

During severe energy shocks, those negative growth effects can outweigh the interest-rate benefit.

That helps explain why the euro has recently struggled even while ECB tightening expectations have increased.

Why This Matters for GBP/USD

The UK faces a similar inflation problem.

The Bank of England held Bank Rate at 3.75% in September, but the vote was 6–3, with three MPC members already preferring an increase to 4%.

The Bank also warned that prolonged Middle East conflict and higher energy prices were creating renewed inflation pressure.

For traders, this week's oil price may therefore be almost as important as the official UK calendar.

The latest policy position can be reviewed through the Bank of England's official Monetary Policy Summary .

UK Gilt Yields Could Move GBP/USD Even Without Major UK Data

Sterling traders should also watch the UK bond market closely.

UK 30-year gilt yields recently climbed above 6% for the first time since 1998, while 10-year yields reached levels not seen since 2007.

Normally, higher yields can support a currency.

But there is an important distinction between:

The second scenario is far less positive for sterling.

GBP/USD fell to roughly 1.3193 on October 1 despite extremely high UK yields.

That is a useful reminder that bond-market stress can weaken sterling even when UK interest rates are expected to rise.

With the Autumn Budget approaching and investors closely examining UK fiscal policy, sudden moves in gilt yields remain a genuine GBP/USD risk.

France's Fiscal Problems Are Becoming a EUR/USD Issue

EUR/USD traders should also monitor France.

French fiscal and political concerns have contributed to widening spreads between French and German government bonds, while European borrowing costs more broadly have risen sharply.

France is preparing substantial borrowing requirements, including plans for approximately €340 billion of bond issuance in 2027, while political opposition to spending cuts remains strong.

These issues matter because EUR/USD represents more than ECB policy.

Confidence in the fiscal stability of major Eurozone economies also matters.

If French spreads widen sharply again, the euro could weaken even if ECB officials sound hawkish.

That is particularly important during periods when markets are already nervous about sovereign debt and global bond yields.

Key EUR/USD Outlook for October 5–11

EUR/USD begins the week with a broadly negative recent trend but with growing potential for two-way volatility.

The recent move below 1.13 shows that Dollar strength remains powerful, but the sharp reduction in October Fed-hike expectations means downside momentum may be less straightforward than it appeared a week ago.

Key GBP/USD Outlook for October 5–11

GBP/USD has fewer major scheduled UK releases, but that does not mean sterling will be quiet.

The pair could be strongly influenced by US data, Federal Reserve policy expectations, energy prices and UK government-bond yields.

The Bank of England's recent 6–3 vote also means markets must take the possibility of additional UK tightening seriously.

However, traders should avoid assuming that every increase in UK rate expectations is automatically bullish for GBP/USD.

Forex Week Ahead: What Matters Most?

If I had to reduce the October 5–11 Forex outlook to five questions, they would be:

1. Does US services activity remain strong enough to support the Dollar?
2. Do the FOMC minutes still justify expectations of another rate increase in 2026?
3. Does the ECB sound increasingly concerned about energy-driven inflation?
4. Does the Strait of Hormuz crisis push oil prices higher again?
5. Do European and UK bond markets remain stable?

The interaction between those factors matters more than any single economic release.

EUR/USD and GBP/USD both enter the week after significant Dollar-driven declines, but softer US employment data has created uncertainty around the next Federal Reserve move.

That increases the probability of sharper reactions when new information challenges current expectations.

For Forex traders, this is a week to watch interest-rate expectations, Treasury yields, oil prices and central-bank communication together, rather than trading economic data in isolation.