Forex News
- USD/CAD gains ground as the commodity-linked Canadian Dollar weakens on lower crude Oil prices.
- WTI price slips after Russia’s Novorossiysk port has resumed Oil loading operations following a two-day halt.
- CME FedWatch Tool indicates pricing in a 46% chance of a 25-basis-point Fed rate cut in December.
USD/CAD edges higher after registering modest losses in the previous session, trading around 1.4030 during the Asian hours on Monday. The pair advances as the commodity-linked Canadian Dollar (CAD) struggles amid lower crude Oil prices.
West Texas Intermediate (WTI) Oil price retreats after posting more than 2% gains in the previous session, trading around $59.30 per barrel at the time of writing. Crude Oil prices depreciate amid looming oversupply concerns.
Russia’s Novorossiysk port has resumed oil loading operations after a two-day shutdown triggered by a Ukrainian drone strike. Meanwhile, the IEA has warned that the global oil market could face a substantial surplus next year, potentially around 4 million bpd, as both OPEC and non-OPEC producers increase output amid weakening demand growth.
Traders expect the Bank of Canada (BoE) to hold steady on interest rates through the end of 2026 at a minimum, but that could change if economic conditions deteriorate further. The BoC Consumer Price Index (CPI) data for October is scheduled to be released later in the day.
The USD/CAD pair also holds gains as the US Dollar (USD) gains amid cautious remarks by US Federal Reserve (Fed) officials. Kansas City Fed President Jeffery Schmid said on Friday that monetary policy should “lean against demand growth,” adding that current Fed policy is “modestly restrictive,” which he believes is appropriate.
The CME FedWatch Tool suggests that financial markets are now pricing in a 46% chance that the Fed will cut its benchmark overnight borrowing rate by 25 basis points (bps) at its December meeting, down from the 67% probability that markets priced a week ago.
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
- The Japanese Yen kicks off the new week on a softer note amid the BoJ rate-hike uncertainty.
- The JPY bulls seem rather unimpressed by Japan’s less-worse-than-expected Q3 GDP print.
- Reduced December Fed rate cut bets underpin the USD and lend support to the USD/JPY pair.
The Japanese Yen (JPY) continues with its relative underperformance against its American counterpart during the Asian session on Monday and remains closer to a nine-month low touched last week. A government report showed earlier today that Japan’s economy contracted in the July-September period for the first time in six quarters. This comes on top of Japan's Prime Minister Sanae Takaichi’s fiscal stimulus plans and support for ultra-loose monetary policy, dampening bets for a Bank of Japan (BoJ) rate hike and undermining the JPY. This, along with a modest US Dollar (USD) uptick, assists the USD/JPY pair in holding steady above mid-154.00s.
The JPY bears, however, seem reluctant to place aggressive bets on the back of speculations that Japanese authorities might step into the markets to stem further weakness in the domestic currency. Apart from this, a generally weaker tone around the equity markets contributes to limiting deeper losses for the safe-haven JPY. The USD, on the other hand, might struggle to attract any meaningful buyers amid worries about the weakening economic momentum on the back of the longest-ever US government shutdown. This, in turn, warrants caution before positioning for an extension of the USD/JPY pair's move up witnessed over the past month or so.
Japanese Yen struggles to lure buyers as economic contraction adds to BoJ uncertainty
- The Cabinet Office reported this Monday that Japan's economy contracted by 0.4% in the July-September period, marking the first fall in six quarters. Furthermore, the Gross Domestic Product fell 1.8% year-on-year in the September quarter following a 2.3% rise in the previous quarter.
- The readings were less worse than consensus estimates, though pointed to a limited strength in the Japanese economy. This forced investors to pare their bets that the Bank of Japan will hike interest rates soon amid increasing political resistance and undermines the Japanese Yen.
- Japan's Prime Minister Sanae Takaichi’s administration is compiling a stimulus package to cushion the blow to households from rising living costs. Takaichi said last week that she would work on setting a new fiscal target extending through several years to allow more flexible spending.
- China and Japan exchanged sharp warnings after Takaichi’s remarks over the use of military force in any Taiwan conflict. In response, China threatened severe consequences, raising the risk of further escalation of tensions and the worsening diplomatic standoff between the two nations.
- This, in turn, is seen weighing on investors' sentiment and offering some support to the safe-haven JPY. Meanwhile, the recent decline in the JPY prompted some verbal intervention from Japanese authorities. This further holds back the JPY bears from placing fresh bets and limits losses.
- In fact, Japan's Finance Minister Satsuki Katayama said last week that she will be watching FX moves with a sense of urgency. Moreover, Japan's Economy Minister Minoru Kiuchi said on Friday that a weak JPY can push up CPI through import costs, warranting caution for the JPY bears.
- Meanwhile, a growing number of Federal Reserve policymakers signaled caution on further easing amid the lack of economic data. This tempers expectations for another interest rate cut by the US central bank in December, which lends some support to the US Dollar and the USD/JPY pair.
- The market attention now shifts to the delayed release of the closely-watched US Nonfarm Payrolls report on Thursday. Apart from this, FOMC meeting minutes and Fed speeches will be scrutinized for cues about the future rate-cut path, which should provide a fresh impetus to the buck.
USD/JPY bulls now await acceptance above 155.00 before positioning for further gains
From a technical perspective, Friday's goodish rebound from the 153.60 support, representing the 100-period Simple Moving Average (SMA) on the 4-hour chart, and a close above the 154.45-154.50 hurdle favors the USD/JPY bulls. Moreover, oscillators on the daily chart are holding comfortably in positive territory and are still away from being in the overbought zone. Some follow-through buying and acceptance above the 155.00 psychological mark will reaffirm the constructive outlook and lift spot prices to the 155.60-155.65 intermediate barrier en route to the 156.00 round figure.
On the flip side, weakness below the 154.00 immediate support might continue to attract some buyers and find decent support near the 153.60-153.50 region, below which the USD/JPY pair could slide to the 153.00 round figure. The latter should act as a key pivotal point, which, if broken decisively, might shift the near-term bias in favor of bearish traders and drag spot prices to the next relevant support near the 152.15-152.10 area.
Economic Indicator
Gross Domestic Product (QoQ)
The Gross Domestic Product (GDP), released by Japan’s Cabinet Office on a quarterly basis, is a measure of the total value of all goods and services produced in Japan during a given period. The GDP is considered as the main measure of Japan’s economic activity. The QoQ reading compares economic activity in the reference quarter to the previous quarter. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.
Read more.Last release: Sun Nov 16, 2025 23:50 (Prel)
Frequency: Quarterly
Actual: -0.4%
Consensus: -0.6%
Previous: 0.5%
Source: Japanese Cabinet Office
- Australian Dollar slips despite cautious RBA policy outlook.
- ASX futures at 96.41 signal only a 6% probability of an RBA cut to 3.35% from 3.60% in December.
- The US Dollar gains ground on diminishing Fed rate cut likelihood.
The Australian Dollar (AUD) loses ground against the US Dollar (USD) on Monday after registering gains in the previous session. The AUD/USD pair depreciates as the US Dollar (USD) gains on cautious remarks from US Federal Reserve (Fed) officials, diminishing the likelihood of an interest rate cut in December.
The AUD found support after stronger domestic employment data reinforced expectations for a cautious stance from the Reserve Bank of Australia (RBA). As of the latest update on November 14, the ASX 30-Day Interbank Cash Rate Futures for December 2025 traded at 96.41, reflecting a 6% probability of a rate cut to 3.35% from 3.60% at the upcoming RBA Board meeting.
RBA Deputy Governor Andrew Hauser said last week, “Our best estimate is that monetary policy remains restrictive, though the committee continues to debate this.” Hauser added that if the policy is no longer mildly restrictive, it would have significant implications for future decisions.
Reuters reported on Sunday that US Treasury Secretary Scott Bessent said a rare earths agreement between the United States (US) and China will “hopefully” be finalized by Thanksgiving. He added that he is confident China will uphold its commitments following the recent meeting in Korea between the two leaders, President Trump and President Xi Jinping.
US Dollar advances due to diminishing Fed rate cut bets
- The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is advancing and trading around 99.40 at the time of writing. Traders brace for a backlog of US data following the government's reopening.
- The CME FedWatch Tool suggests that financial markets are now pricing in a 46% chance that the Fed will cut its benchmark overnight borrowing rate by 25 basis points (bps) at its December meeting, down from 67% probability that markets priced a week ago.
- Kansas City Fed President Jeffery Schmid said on Friday that monetary policy should “lean against demand growth,” adding that current Fed policy is “modestly restrictive,” which he believes is appropriate.
- National Economic Council Director Kevin Hassett cautioned that some October data may “never materialize,” as several agencies were unable to gather information during the shutdown. Initial private-sector reports suggest a cooling labor market and wavering consumer confidence, with persistent concerns about inflation.
- US President Donald Trump signed the government funding bill on Thursday, marking the official end of the record 43-day government shutdown in US history.
- Federal Reserve Bank of St. Louis President Alberto Musalem said Thursday that rates are now closer to neutral than restrictive and the US economy remains resilient. Musalem stressed the need for caution, noting there is limited room to ease without risking overly accommodative policy.
- Minneapolis Fed President Neel Kashkari, speaking at the Opportunity & Inclusive Growth Institute’s Research Conference, said parts of the labor market appear strained and the economy is sending mixed signals. He added that inflation remains too high at 3%.
- Automatic Data Processing (ADP) released the US Employment Change on Tuesday, showing an average weekly job loss of 11,250 in the four weeks to October 25. Weaker-than-expected private US labor data increased the likelihood of the Federal Reserve (Fed) policy easing. Challenger, Gray & Christmas announced that US employers slashed 153,074 jobs in October, up from the 55,597 cuts announced in October 2024.
- The National Bureau of Statistics (NBS) showed Friday that China’s Retail Sales climbed 2.9% year-over-year (YoY) in October, against the 3.0% in September but exceeding the 2.7% expected. Meanwhile, Industrial Production increased 4.9% YoY in the same period, compared to the 5.5% forecast and 6.5% seen previously. The Fixed Asset Investment came in at -1.7% year-to-date (YTD) YoY in October, missing the expected -0.8% figure. The September reading was -0.5%.
- The National Bureau of Statistics in China outlined its economic outlook at Friday’s press conference, saying it will continue to foster new productive forces. It noted that better supply-demand dynamics, along with rising prices for services and industrial goods, pushed October CPI back into positive territory. The bureau added that ongoing economic stabilization provides a solid foundation for China to meet its full-year growth target.
- The Australian Bureau of Statistics (ABS) released the Unemployment Rate on Thursday, which declined to 4.3% in October from 4.5% in September, against the market expectations of 4.4%. Meanwhile, the Employment Change arrived at 42.2K in the same month from 12.8K (revised from 14.9K) prior, sharply exceeding the market forecast of 20K.
- Australia’s Full-Time Employment rose by 55.3K in October, from a rise of 6.5K in the previous reading (revised from 8.7K). Participation Rate steadies at 67%, while the Part-Time Employment decreased by 13.1K in October, versus an increase of 6.3K prior.
Australian Dollar hovers around nine-day EMA
The AUD/USD pair is trading around 0.6520 on Monday. The analysis of the daily chart shows the pair consolidating within a rectangular range, reflecting sideways movement. The price hovers around the nine-day Exponential Moving Average (EMA), suggesting that momentum is stabilizing.
The AUD/USD pair may attempt to reach the rectangle’s upper boundary near 0.6630. A decisive break above this level would signal a bullish shift, potentially paving the way for a move toward the 13-month high of 0.6707, last seen on September 17.
On the downside, the primary support lies at the lower boundary of the rectangle around 0.6470, followed by the five-month low of 0.6414, which was recorded on August 21.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.14% | 0.11% | 0.06% | 0.04% | 0.24% | 0.26% | 0.11% | |
| EUR | -0.14% | -0.04% | -0.05% | -0.10% | 0.10% | 0.11% | -0.03% | |
| GBP | -0.11% | 0.04% | -0.04% | -0.07% | 0.13% | 0.15% | 0.00% | |
| JPY | -0.06% | 0.05% | 0.04% | -0.03% | 0.17% | 0.18% | 0.04% | |
| CAD | -0.04% | 0.10% | 0.07% | 0.03% | 0.20% | 0.21% | 0.07% | |
| AUD | -0.24% | -0.10% | -0.13% | -0.17% | -0.20% | 0.01% | -0.13% | |
| NZD | -0.26% | -0.11% | -0.15% | -0.18% | -0.21% | -0.01% | -0.14% | |
| CHF | -0.11% | 0.03% | -0.00% | -0.04% | -0.07% | 0.13% | 0.14% |
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 Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
- WTI price tumbles to $59.35 in Monday’s Asian session.
- Novorossiysk port resumes oil trade after Ukrainian attack.
- Markets brace for a flood of delayed economic reports that could point to a slowing US economy.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $59.35 during the Asian trading hours on Monday. The WTI attracts some sellers following signs that activity had resumed at the key Russian port of Novorossiysk on the Black Sea. Traders await the release of the American Petroleum Institute (API) weekly crude oil stock report later on Tuesday.
Russia's Novorossiysk port resumed oil loadings on Sunday after a Ukrainian strike last week led to some damage and a suspension of operations for two days. Russian crude oil shipments via Novorossiysk's Sheskharis terminal totalled 3.22 million tonnes, or 761,000 barrels a day, in October, according to industry sources. A total of 1.794 million tonnes of oil products were exported through Novorossiysk in October, the sources said. The resumption of operations eases concerns about a disrupted oil supply and weighs on the WTI price.
The end of the US government shutdown and the restoration of federal workers' pay were expected to boost economic activity and demand for oil in the world's largest crude consumer. However, traders are concerned that the resumption of US economic data will show job market weakness and a potential slowdown. This could prompt the Federal Reserve (Fed) to reduce interest rates in December. Lower interest rates generally weaken the US Dollar (USD) as it makes oil cheaper for foreign buyers, boosting global demand and lifting WTI prices.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
On Monday, the People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead at 7.0816 compared to Friday's fix of 7.0825 and 7.0956 Reuters estimate.
PBOC FAQs
The primary monetary policy objectives of the People's Bank of China (PBoC) are to safeguard price stability, including exchange rate stability, and promote economic growth. China’s central bank also aims to implement financial reforms, such as opening and developing the financial market.
The PBoC is owned by the state of the People's Republic of China (PRC), so it is not considered an autonomous institution. The Chinese Communist Party (CCP) Committee Secretary, nominated by the Chairman of the State Council, has a key influence on the PBoC’s management and direction, not the governor. However, Mr. Pan Gongsheng currently holds both of these posts.
Unlike the Western economies, the PBoC uses a broader set of monetary policy instruments to achieve its objectives. The primary tools include a seven-day Reverse Repo Rate (RRR), Medium-term Lending Facility (MLF), foreign exchange interventions and Reserve Requirement Ratio (RRR). However, The Loan Prime Rate (LPR) is China’s benchmark interest rate. Changes to the LPR directly influence the rates that need to be paid in the market for loans and mortgages and the interest paid on savings. By changing the LPR, China’s central bank can also influence the exchange rates of the Chinese Renminbi.
Yes, China has 19 private banks – a small fraction of the financial system. The largest private banks are digital lenders WeBank and MYbank, which are backed by tech giants Tencent and Ant Group, per The Straits Times. In 2014, China allowed domestic lenders fully capitalized by private funds to operate in the state-dominated financial sector.
- GBP/USD softens to around 1.3155 in Monday’s early Asian session.
- Weaker UK economic data has prompted the BoE to deliver another rate cut in December.
- Analysts believe that the resumption of US economic data will show job market weakness and a potential slowdown.
The GBP/USD pair declines to near 1.3155 during the early Asian session on Monday. The Pound Sterling (GBP) softens against the US Dollar (USD) amid concerns about the UK's fiscal debt and weak economic data from the UK. Bank of England (BoE) External Member Catherine Mann is set to speak later on Monday.
The pound loses ground after a report that UK Prime Minister Keir Starmer and Finance Minister Rachel Reeves have dropped the plan to raise income tax rates, in a dramatic turn ahead of the budget on November 26.
Additionally, the recent UK economic data, including cooling wage growth and weaker Gross Domestic Product (GDP) data, have prompted further economic concerns and fueled bets on a December rate cut from the BoE. This, in turn, could weigh on the GBP in the near term. Bets for a 0.25 percentage point cut have surged to near 80% probability, according to Reuters.
On the other hand, traders brace for a backlog of US data following the government's reopening, which they expect will likely point to a weakening economy. This might drag the Greenback lower and create the tailwind for the major pair.
Financial markets are now pricing in nearly a 54% chance that the US central bank will cut its benchmark overnight borrowing rate by 25 basis points (bps) at its December meeting, down from a 62.9% probability that markets priced in earlier last week, according to the CME FedWatch Tool.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- EUR/USD depreciates as the US Dollar gains on cautious Fedspeak.
- CME FedWatch Tool indicates pricing in a 46% chance of a 25-basis-point Fed rate cut in December.
- ECB’s Olli Rehn warned that the risk of slowing inflation should not be overlooked.
EUR/USD extends its losses for the second successive session, trading around 1.1610 during the Asian hours on Monday. The pair appreciates as the US Dollar (USD) receives support from cautious remarks given by US Federal Reserve (Fed) officials, diminishing the likelihood of an interest rate cut in December.
Kansas City Fed President Jeffery Schmid said on Friday that monetary policy should “lean against demand growth,” adding that current Fed policy is “modestly restrictive,” which he believes is appropriate.
The CME FedWatch Tool suggests that financial markets are now pricing in a 46% chance that the Fed will cut its benchmark overnight borrowing rate by 25 basis points (bps) at its December meeting, down from the 67% probability that markets priced a week ago.
The Greenback also gained ground as market sentiment improved after the US government reopened following US President Donald Trump's signing of a funding bill into law last week, ending the longest shutdown in US history, which lasted 43 days. Federal employees were directed to return to work on Thursday.
Bloomberg reported on Saturday that European Central Bank (ECB) Governing Council Member Olli Rehn cautioned that the risk of slowing inflation should not be overlooked, though upside risks remain. Rehn noted that the euro-area economy is holding up despite disruptions from the Trump administration’s tariff policies, with growth slow but steady. He also emphasized the need for strong bank buffers and a vigilant policy stance.
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- NZD/USD struggles to capitalize on Friday’s strong move up to an over one-week high.
- A weaker risk tone drives safe-haven flows towards the USD and weighs on the Kiwi.
- China’s economic woes and RBNZ rate cut bets also contribute to capping spot prices.
The NZD/USD pair kicks off the new week on a subdued note and oscillates in a narrow band around the 0.5670-0.5675 region during the Asian session. Spot prices, however, remain close to a one-and-a-half-week high, around the 0.5700 neighborhood, touched on Friday amid mixed cues.
US President Donald Trump on Friday removed tariffs on roughly $1.25 billion worth of New Zealand's exports to the country, which is seen as a key factor acting as a tailwind for the NZD/USD pair. However, concerns about China's economy, along with bets for another interest rate cut by the Reserve Bank of New Zealand (RBNZ) at the November 26 meeting, hold back traders from placing aggressive bullish bets around the New Zealand Dollar (NZD).
The US Dollar (USD), on the other hand, attracts some safe-haven flows amid a generally weaker tone around the equity markets and contributes to capping the risk-sensitive NZD/USD pair. Any meaningful USD appreciation, however, seems elusive amid worries about the weakening economic momentum on the back of the longest-ever US government shutdown. This, along with dovish Federal Reserve (Fed) expectations, might keep a lid on further gains for the buck.
According to the CME Group's FedWatch Tool, traders are still pricing in around a 50% chance that the US central bank will lower borrowing costs next month. Adding to this, hopes for further stimulus from China offer some support to antipodean currencies, including the Kiwi. This, in turn, warrants some caution before confirming that the NZD/USD pair's bounce from the vicinity of the 0.5600 mark, or a multi-month low, has run its course and positioning for deeper losses.
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.
US Treasury Secretary Scott Bessent said that a rare earths deal between the U.S. and China will "hopefully" be done by Thanksgiving, Reuters reported on Sunday.
Key quotes
Rare earths deal with China will "hopefully" be done by Thanksgiving.
I am confident that post our meeting in Korea between the two leaders, President Trump, President Xi (Jinping), that China will honor their agreements.
Market reaction
At the time of writing, the US Dollar Index (DXY) is trading 0.08% higher on the day to trade at 99.37.
US-China Trade War FAQs
Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.
An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.
The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.
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