Forex News
- BoJ Meeting Minutes confirm policymakers favor rate hikes as inflation nears the 2% target, boosting JPY sentiment.
- Sliding crude prices after Trump's Middle East comments weighed on energy costs and the US Dollar.
- Downside for USD/JPY remains capped by strong US Nonfarm Payrolls and 78%+ December Fed hike odds.
USD/JPY depreciates after posting modest gains the previous day, trading around 158.00 during European hours on Monday. The currency pair loses ground as the Japanese Yen (JPY) advances, driven by Bank of Japan (BoJ) Meeting Minutes indicating policymakers are prepared to accelerate monetary tightening.
However, the BoJ held rates steady at its previous meeting; it emphasized its commitment to managing inflationary risks, cementing market expectations for a December rate hike. The September Meeting Minutes revealed widespread agreement among policymakers that further rate increases are appropriate as underlying inflation nears the central bank's 2% target.
Reinforcing this hawkish stance, former BoJ chief economist Seisaku Kameda noted that the central bank is likely to hike rates in December and continue raising borrowing costs toward 2% next year to curb persistent price pressures.
Yen draws haven flows at the expense of the Dollar
Strategists at ABN Amro highlight that recent risk-off sentiment has reinforced the Yen’s safe-haven status, noting that “haven demand favoured the JPY over the USD” as investors sought defensive currency exposure.
Adding downward pressure on the USD/JPY pair, the US Dollar (USD) is confronting headwinds from easing energy prices. Crude oil pulled back after US President Donald Trump stated that further military action against Iran is "highly unlikely," contingent on continued progress on Iran's nuclear program and the Strait of Hormuz remaining open. Trump also acknowledged that the unpopular Middle East conflict had previously inflated energy costs and contributed to recent Republican midterm election losses.
However, downside risk for the Greenback remains limited due to robust US labor market data that has heightened expectations for continued monetary tightening. According to the CME FedWatch tool, market-implied probabilities for a 25-basis-point rate hike at the December Federal Open Market Committee (FOMC) meeting have surged past 78%. This hawkish sentiment is backed by October Nonfarm Payrolls (NFP), which added 165,000 jobs, substantially outperforming the 65,000 consensus estimate and building on September's revised 60,000 figure, while the Unemployment Rate dipped to 4.1%, beating forecasts of 4.2%. Investors are now awaiting Tuesday's Consumer Price Index (CPI) and Friday's Producer Price Index (PPI) reports for definitive signals on the Federal Reserve's policy trajectory.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
- NZD/USD appreciates to session highs at 0.5600 from Friday's lows at 0.5527.
- The first results of New Zealand's general election give a narrow victory to the governing coalition.
- Market sentiment has improved as strong US labour data has eased concerns about an AI crisis.
The New Zealand Dollar (NZD) has bounced up strongly against the US Dollar (USD) on Monday, following a tight result in New Zealand's general election amid a fragile appetite for risk at the start of the trading week. The NZD/USD pair has reached session highs at 0.5600, up from 0.5527 lows on Friday, although it is trading at the 0.5590 area at the time of writing.
Prime Minister Christopher Luxon seems to have obtained enough support to remain in power as his Centre-right National Party and the supporting Labour Party together hold 67 of the 131 seats in Parliament. The coalition, however, has lost about 30% of the previous election's support, as voters abandoned traditional parties for more radical, minor parties, like the leftist Greens or the libertarian Act Party.
Final results, however, will have to wait, as there are still about 400,000 votes from New Zealanders living abroad or outside the voter’s electorate that will not be counted until November 27. The leaders of the major parties affirmed that they will not start coalition negotiations until the final results are known.
AI fears have eased, but risk appetite remains fragile
Meanwhile, market sentiment has improved somewhat since last week, as the strong US Nonfarm Payrolls figures seen on Friday contributed to ease concerns about the challenges ahead for the AI sector, at least for now. Asian Markets have bounced up from lows, with most equity indexes showing minor advances, although the tech-heavy Kospi Index remains 0.8% down, which shows that risk appetite is still subdued.
In the US, Nonfarm Payrolls beat expectations on Friday with a 165K increase in net jobs, well above the 65K expected, and with the Unemployment Rate falling unexpectedly to 4.1% in October, from 4.2% in the previous month.
These figures boosted hopes that the Federal Reserve (Fed) will hike rates again in December, a view that was endorsed later in the day by New York Fed President John Williams, San Louis Fed President Alberto Musalem, and San Francisco Fed President Mary Daly.
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.
The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.
Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.
The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
Deutsche Bank’s Jim Reid and team note the Dollar Index closed at 102.11, up 0.51%, as markets pivot from strong US payrolls toward October CPI and PPI. Their economists expect softer monthly inflation prints, while year-on-year CPI cannot be calculated due to missing 2025 index levels. They still project 25bp Fed rate hikes in December and March.
Dollar supported by data and Fed
"We move on from payrolls to US inflation as the main macro focus this week, with October CPI tomorrow and PPI on Friday, alongside a busy slate of Fed speakers."
"Our economists expect headline CPI to rise by 0.20% month-on-month, down from 0.65% previously, with core CPI also up 0.20% after 0.33% last time."
"Because October 2025 index levels were not produced during last year’s government shutdown, year-on-year inflation rates cannot be calculated for this release."
"Our economists expect producer prices to rise by 0.20% month-on-month, compared with 0.32% in September, leaving the year-on-year rate broadly steady at 3.1%."
"Our economists continue to expect 25bp rate increases at the December and March FOMC meetings, absent a further material tightening in financial conditions."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
- The Indian Rupee hovered near seven-month highs following over $4.1 billion in foreign stock purchases this November.
- October Nonfarm Payrolls rose by 165,000, significantly exceeding expectations and limiting the Greenback’s downside.
- CME FedWatch indicates over a 78% probability of a 25-basis-point Fed rate increase.
USD/INR continues its losing streak for the eighth successive day, trading around 93.80 during early European hours on Monday. The currency pair is hovering near seven-month lows as the Indian Rupee (INR) gains strong support from massive foreign capital inflows. Overseas investors have injected over $4.1 billion into Indian equities so far in November, marking their largest monthly net buying since September 2024.
Meanwhile, a broader retreat from global AI-linked technology stocks is encouraging market participants to rotate capital back into regional Asian assets. As investors re-evaluate overextended tech valuations, India has emerged as a key beneficiary, drawing interest for its relatively undervalued equity market.
Additionally, the USD/INR pair struggles as the US Dollar (USD) faces challenges as a decline in crude oil prices helps ease inflationary pressures. Energy markets pulled back after US President Donald Trump signaled that further military action against Iran is "highly unlikely," contingent on continued progress regarding Iran's nuclear program and the Strait of Hormuz remaining open. Trump also acknowledged that the unpopular conflict in the Middle East, which had previously driven energy costs higher, played a key role in the Republicans' recent midterm election losses.
However, the downside of the Greenback could be limited as the stronger US labor market data heightened expectations for monetary tightening. According to the CME FedWatch tool, the probability of a 25-basis-point interest rate hike at the December Federal Open Market Committee (FOMC) meeting has surged past 78%.
Fed-hawk-leaning sentiment is strongly underpinned by robust US employment metrics. October Nonfarm Payrolls (NFP) surged by 165,000, substantially outperforming the 65,000 consensus estimate and building on September's revised 60,000 figure, while the Unemployment Rate dipped to 4.1%, beating the 4.2% forecast.
Traders and market participants are now turning their focus to Tuesday's Consumer Price Index (CPI) report and Friday's Producer Price Index (PPI) release for definitive cues on the Federal Reserve's upcoming policy path.
Indian Rupee FAQs
The Indian Rupee (INR) is one of the most sensitive currencies to external factors. The price of Crude Oil (the country is highly dependent on imported Oil), the value of the US Dollar – most trade is conducted in USD – and the level of foreign investment, are all influential. Direct intervention by the Reserve Bank of India (RBI) in FX markets to keep the exchange rate stable, as well as the level of interest rates set by the RBI, are further major influencing factors on the Rupee.
The Reserve Bank of India (RBI) actively intervenes in forex markets to maintain a stable exchange rate, to help facilitate trade. In addition, the RBI tries to maintain the inflation rate at its 4% target by adjusting interest rates. Higher interest rates usually strengthen the Rupee. This is due to the role of the ‘carry trade’ in which investors borrow in countries with lower interest rates so as to place their money in countries’ offering relatively higher interest rates and profit from the difference.
Macroeconomic factors that influence the value of the Rupee include inflation, interest rates, the economic growth rate (GDP), the balance of trade, and inflows from foreign investment. A higher growth rate can lead to more overseas investment, pushing up demand for the Rupee. A less negative balance of trade will eventually lead to a stronger Rupee. Higher interest rates, especially real rates (interest rates less inflation) are also positive for the Rupee. A risk-on environment can lead to greater inflows of Foreign Direct and Indirect Investment (FDI and FII), which also benefit the Rupee.
Higher inflation, particularly, if it is comparatively higher than India’s peers, is generally negative for the currency as it reflects devaluation through oversupply. Inflation also increases the cost of exports, leading to more Rupees being sold to purchase foreign imports, which is Rupee-negative. At the same time, higher inflation usually leads to the Reserve Bank of India (RBI) raising interest rates and this can be positive for the Rupee, due to increased demand from international investors. The opposite effect is true of lower inflation.
Here is what you need to know on Monday, November 9:
The US Dollar (USD) loses strength early Monday following the bullish action seen at the end of the previous week. The European economic calendar will feature Sentix Investors Confidence data for November. Later in the day, several policymakers from the Federal Reserve (Fed) are scheduled to deliver speeches. On Tuesday, October Consumer Price Index data from the US could ramp up the market volatility.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.21% | -0.27% | -0.19% | -0.16% | -0.40% | -0.95% | -0.13% | |
| EUR | 0.21% | -0.05% | 0.04% | 0.04% | -0.20% | -0.75% | 0.07% | |
| GBP | 0.27% | 0.05% | 0.11% | 0.09% | -0.15% | -0.69% | 0.13% | |
| JPY | 0.19% | -0.04% | -0.11% | 0.01% | -0.22% | -0.77% | 0.05% | |
| CAD | 0.16% | -0.04% | -0.09% | -0.01% | -0.23% | -0.78% | 0.04% | |
| AUD | 0.40% | 0.20% | 0.15% | 0.22% | 0.23% | -0.55% | 0.27% | |
| NZD | 0.95% | 0.75% | 0.69% | 0.77% | 0.78% | 0.55% | 0.83% | |
| CHF | 0.13% | -0.07% | -0.13% | -0.05% | -0.04% | -0.27% | -0.83% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
The US Bureau of Labor Statistics reported on Friday that Nonfarm Payrolls (NFP) rose by 165K in October. This print followed the 60K increase recorded in September (revised from 29K) and surpassed the market expectation of 65K by a wide margin. Moreover, the Unemployment Rate declined to 4.1% from 4.2% in this period, while the Labor Force Participation Rate improved to 61.9% from 61.8%. With the immediate reaction to upbeat labor market data, the USD Index gathered bullish momentum and gained about 0.7% on the day. In the European morning on Monday, the USD Index corrects lower but manages to hold slightly above 102.00.
Improving risk mood at the beginning of the week seems to be making it difficult for the USD to continue to outperform its rivals. US President Donald Trump said fresh attacks on Iran were “highly unlikely” if negotiations to end the conflict continued to progress, CNN reported. Trump is expected to meet with Qatar's Prime Minister later in the day to discuss a new ceasefire and resuming nuclear talks. Meanwhile, Saudi Arabia said a Saudi Aramco administrative building in Riyadh was damaged by falling debris following an attempted attack, and the Saudi-led coalition claimed to have intercepted two ballistic missiles and two cruise missiles targeting the kingdom. Oil prices edge lower early Monday, with the barrel of West Texas Intermediate losing about 1% on the day.
Reflecting the positive shift in market sentiment, US stock ndex futures trade in positive territory, with the Dow Futures leading the day with a 0.7% gain at the time of press.
EUR/USD fell nearly 0.7% on Friday and erased its weekly gains. Early Monday, EUR/USD clings to marginal recovery gains above 1.1150.
Gold registered losses on Friday but rose nearly 5% for the week. The precious metal gains traction to start the new week and trades above $4,100, up about 1% on the day.
Gold’s resilience hints at returning safe-haven appeal
Analysts at OCBC highlight that Gold’s performance has been notable in recent sessions, with “Gold’s relative resilience despite the sharp equity selloff” seen as “encouraging.” They argue that, following the recent correction and a reduction in speculative positioning, “Gold may be gradually regaining some of its safe-haven appeal, potentially providing shelter amid turbulence elsewhere in financial markets.” However, OCBC cautions that “the extent to which Gold can hold up if equity weakness persists will be an important test,” suggesting that the durability of this renewed safe-haven bid will hinge on how risk assets trade in the days ahead.
GBP/USD gathers recovery momentum and rises toward 1.3400 early Monday after having closed in negative territory for two consecutive days. Later in the day, Bank of England Governor Andrew Bailey will speak at the Swiss Institute of International Studies Lecture Series and Dinner at the University of Zurich in Switzerland.
USD/JPY gained about 0.5% on Friday to end the previous week in the green. The pair struggles to keep its footing and declines toward 158.00 in the European morning.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
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