[MARKET ANALYSIS] DXY grinds higher; GBP lags ahead of Wednesday's Budget, whilst EUR holds after Moody's spares France

• G10s are broadly softer against a firmer USD. The GBP is the clear underperformer, whilst the JPY and Antipodeans also trade lower vs the Dollar. The EUR is flat and holds up relatively well, after France avoided a ratings downgrade from Moody's on Friday.
• DXY softened in Asia as oil prices pulled back and yields eased, but has gradually ground higher since, and currently sits at the top end of a 101.58 to 101.82 range ahead of Friday and Thursday’s peaks at 101.85 and 101.88 respectively. The US data docket is light for the day (Dallas Fed Manufacturing, Chicago Fed National Activity), so attention turns to Wednesday's FOMC, where money markets lean heavily towards a hold, alongside a busy week of tech earnings and any US-Iran developments. In geopolitics, President Trump said he is nearing a decision on whether to strike a deal with Iran or resume military strikes. Meanwhile, Barclays' month-end model points to weak USD buying vs most majors, with no directional bias against EUR or JPY.
• GBP is the laggard this morning, and Cable trades at the bottom end of a 1.3344-1.3388 range after finding resistance at the 100 DMA (1.3387), with no clear driver for the weakness apart from a myriad of UK budget leaks over the weekend and relative aforementioned EUR resilience. Focus this week is on Wednesday's Autumn Budget, where Chancellor Healey is expected to confirm a 3.9% rise in the full state pension, while it was also reported over the weekend that PM Burnham opened the door to Britain readopting the EU's free-movement rules.
• EUR/USD trades in a tight 1.1202-1.1227 range, holding just above the 1.12 mark, where EUR 1.2bln of options roll off at today's NY cut. Moody's maintained France's Aa3 rating with a negative outlook on Friday, defying some expectations of a downgrade, while France largely avoided a repeat of the looting seen during previous protests on Saturday; further protests are planned for 31st October and 5th November. The ECB policy decision is due on Thursday.
• USD/JPY is firmer and holds towards the upper end of a 156.65-157.31 range, with USD 3.1bln of options at 158.00 rolling off at today's NY cut. The BoJ is widely expected to keep rates on hold when it concludes its two-day meeting on Friday.
• The Antipodeans are softer; NZD/USD trades towards the bottom end of a 0.5685-0.5707 range, while AUD/USD holds within a 0.7022-0.7040 band. Both are in focus this week, with the RBNZ policy decision on Wednesday and Australian CPI also due Wednesday.

Sessions of this shape, a firmer dollar against broadly softer G10s with no single catalyst, tend to be driven by positioning into an event-heavy calendar rather than fresh information, and the week's cluster of central bank decisions (FOMC, ECB, BoJ, RBNZ) plus a UK Budget fits that pattern. The GBP underperformance ahead of a fiscal event is a well-worn sequence: budget leaks in the run-up have historically weighed on the currency when they raise questions about the fiscal mix or the political stability of the package, and the tell on the day itself has typically been gilt yields rather than the headline measures, with GBP following the front end of the curve. The EUR's relative resilience after a ratings agency spares a sovereign is also a familiar pattern, where the avoidance of a downgrade matters less than the negative outlook that remains, and French political risk has tended to express itself through OAT-Bund spreads before it shows in the single currency. Month-end rebalancing models pointing to USD buying, as flagged here, are worth noting because such flows have historically been a late-month distortion that reverses once the fix passes. The large option expiries at nearby strikes in EUR/USD and USD/JPY are the kind of technical anchor that has often pinned spot into the cut before releasing it. The distinction to draw is between event risk that resolves this week (Budget, FOMC) and structural stories (France, UK free-movement talk) that reprice more slowly.