Forex News

• EUR/USD erases weekly gains as stronger-than-expected US jobs data boosts the US Dollar.
• US Nonfarm Payrolls rise by 165K in October, well above the 65K forecast.
• Weak Eurozone Retail Sales and cautious ECB commentary add to the Euro's downside pressure.

EUR/USD slips on Friday, erasing all gains recorded this week as stronger-than-expected US Nonfarm Payrolls (NFP) data boosts demand for the US Dollar (USD). At the time of writing, the pair trades around 1.1132, down 0.77% on the day.

The US economy added 165K jobs in October, more than double the 65K forecast, while September’s increase was revised higher to 60K from 29K. The Unemployment Rate fell to 4.1% from 4.2%.

Wage growth also beat forecasts. Average Hourly Earnings rose 0.4% MoM, above the 0.3% expected. Annual wage growth eased to 3.1% from 3.2%, but came above the 2.9% forecast.

The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, trades around 102.33, up 0.73% on the day.

The figures point to a resilient labour market, a view shared by most Fed officials. Against this backdrop, another rate hike in December remains in play as the Fed stays committed to bringing inflation back to its 2% target. Inflation risks remain tilted to the upside, particularly from higher energy costs linked to the Middle East conflict.

Across the Atlantic, weaker-than-expected Eurozone Retail Sales also weigh on the Euro. Sales fell 0.7% MoM in September, compared with a 0.1% decline expected, following a 2% drop in August. Annual growth slowed to 0.4% from 1.3%, below the 0.6% forecast.

On the monetary policy front, traders expect the European Central Bank (ECB) to raise interest rates again in December, though policymakers remain cautious. Chief Economist Philip Lane said on Friday that inflation needs to return to target within a year or two, while noting that financial conditions have already tightened. “Let’s gather information between now and December and let’s see what we do in December,” Lane said, echoing ECB President Christine Lagarde’s remarks on Thursday.

ING’s Frantisek Taborsky says the Czech National Bank’s dovish signal contrasts with expectations for at least two more rate hikes and a hawkish repricing. He sees EUR/CZK trading in a 24.350–24.400 range, supported by seasonal koruna strength despite renewed upward pressure. In Poland, the National Bank of Poland’s more hawkish stance may support the zloty, although global risk aversion remains the key driver of CEE currencies.

CNB cautious, NBP turns more hawkish

"The market interprets this as a dovish signal, suggesting the CNB is unwilling to hike rates further unless the inflation situation deteriorates significantly. For the first time since the onset of the US-Iran conflict, the CNB’s forecast aligns closely with market pricing, with the PRIBOR rate peaking at around 4.55%. However, inflation is expected to worsen over the remainder of the year, approaching 3% and nearing 4% in 27Q1."

"We do not believe the current shift in energy prices justifies such a rally in CZK rates. Consequently, we view two additional rate hikes as the minimum the market will tolerate, and we anticipate a hawkish repricing."

"EUR/CZK is facing renewed upward pressure. Indeed, if we take the shift in rate differentials at face value, the rates point toward 24.450."

"Furthermore, the koruna benefits from strong seasonal support in November and December, which should help temper the current weakening pressure following the dovish CNB meeting. We therefore anticipate a new range of 24.350-24.400, little changed from our pre-meeting expectations."

"For now, it is clear that the zloty may receive some support from the NBP’s shift toward a more hawkish stance. Nevertheless, global factors remain the primary driver; yesterday’s trading saw a rapid swing back to risk-off sentiment, renewing pressure on CEE currencies."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• Gold extends its decline as stronger-than-expected US jobs data lift the Dollar and Treasury yields.
• Lower Oil prices support Gold's weekly recovery, although hawkish Fed expectations remain a hurdle.
• XAU/USD holds above the 50-period and 100-period SMAs on the 4-hour chart.

Gold (XAU/USD) extends losses below $4,100 on Friday as stronger-than-expected US Nonfarm Payrolls (NFP) data lifts the US Dollar (USD). At the time of writing, XAU/USD trades around $4,050, down 1.20% on the day, after climbing to a two-week high of $4,146 on Thursday.

The US economy added 165K jobs in October, more than double the 65K forecast, while September’s gain was revised higher to 60K from 29K. The Unemployment Rate fell to 4.1% from 4.2%.

The stronger hiring figures point to a resilient labour market, giving the Federal Reserve (Fed) more room to keep fighting inflation and strengthening the case for a December interest rate hike. Higher interest rates increase the appeal of interest-bearing assets, weighing on Gold, which offers no yield.

The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, trades around 102.22, up 0.62% on the day. US Treasury yields also rebound, with the benchmark 10-year yield rising 4 basis points (bps) to 4.88%.

Meanwhile, the deepening AI-led sell-off in equities leaves Gold vulnerable to liquidity-driven selling as investors cut positions to raise cash, meet margin calls or cover losses elsewhere.

Still, bullion remains set to break a three-week losing streak, supported by a sharp drop in Oil prices. West Texas Intermediate (WTI) is down around 12% so far this week as the Democratic sweep of Congress in the US midterm elections fuels expectations that lawmakers could curb President Donald Trump’s military campaign against Iran.

However, a negotiated end to the US-Iran war still appears distant despite ongoing diplomatic efforts, while Oil prices have recovered some ground. US President Donald Trump said the US may have to “destroy” the rest of Iran, adding that people will “know soon enough” whether he will act.

Crude and its impact on inflation and interest rates have been key drivers for bullion since the war began in late February. Higher energy costs have added to pressure on central banks to tighten monetary policy.

Technical analysis: bulls struggle to clear 200-period SMA

On the 4-hour chart, XAU/USD holds above both the 50-period and 100-period Simple Moving Averages (SMAs), hinting at a constructive near-term tone even as it remains capped by the 200-period SMA.

The Relative Strength Index (14) has eased from overbought territory to around 55, suggesting bullish momentum has cooled but remains mildly positive. Meanwhile, the Moving Average Convergence Divergence (MACD) hovers near the zero line, indicating limited directional momentum.

On the topside, immediate resistance is seen at the 200-period SMA at $4,114, followed by the horizontal barrier near $4,200, where a sustained break would open the way for a stronger bullish continuation.

On the downside, initial support is located at the 100-period SMA at $4,050, with the 50-period SMA at $4,004 underpinning the broader structure; a deeper pullback could revisit the year-to-date low around $3,870.23, where buyers would be expected to defend the prevailing uptrend.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Chris Turner at ING highlights Banxico’s surprise 3-2 vote to cut its policy rate to 6.25%, narrowing the Banxico-Fed spread to 225bp, the lowest in decades. He notes Banxico’s focus on weak Mexican growth and a negative output gap, with limited concern about Peso-driven inflation. Turner argues this stance leaves the Peso exposed to external risk, making a move in USD/MXN above 19 more likely than not.

Banxico easing pressures Mexican Peso

"In a surprise move, Banxico voted 3-2 yesterday to cut its policy rate to 6.25%. This narrows the Banxico-Fed policy spread to a mere 225bp – the lowest in decades."

"Banxico is clearly focused on weak growth in Mexico and the negative output gap. It is not worried about the weaker peso contributing to higher inflation, given its view that pricing power for the consumer sector is very weak."

"In a world where central banks are tightening to ride out the inflation hump, Banxico really stands out now."

"Its position leaves the peso very vulnerable to any pick-up in external risk and USD/MXN pushing above 19 seems more likely than not."

"Banxico happy to let the peso drop."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• Canada's unemployment rate rose to 6.7% in October, above market expectations of 6.5%.
• The Canadian economy unexpectedly lost 4.7K jobs, compared with forecasts of 13.6K new positions.
• The Canadian Dollar weakens as disappointing employment figures raise doubts about further BoC interest rate hikes.

Canada's Unemployment Rate rose to 6.7% in October, up from 6.5% in September and above market expectations of 6.5%, according to data released by Statistics Canada on Friday.

Meanwhile, the Net Change in Employment showed a decline of 4.7K jobs in October, missing expectations of a 13.6K increase. However, the reading represents an improvement from the substantial loss of 68.3K jobs recorded in September.

The Canadian economy has shed a total of 114.7K jobs since August, highlighting the persistent weakness of the labour market despite a slowdown in job losses in October.

The deterioration comes amid persistent uncertainty surrounding United States (US) tariffs, which continue to weigh on hiring prospects in trade-sensitive industries. The disappointing employment report also raises questions about the Bank of Canada's (BoC) monetary policy outlook. The central bank raised its benchmark interest rate on October 28, marking its first increase in more than three years, while leaving the door open to further tightening depending on incoming economic data.

Against this backdrop, the unexpected contraction in employment and the increase in the Unemployment Rate could encourage the BoC to adopt a more cautious approach to additional interest rate hikes, particularly as trade tensions continue to weigh on economic activity.

The Canadian Dollar remains under selling pressure following the release, with USD/CAD advancing to around 1.4100 at the time of writing, rising 0.63% on Friday. The Loonie comes under selling pressure following weaker-than-expected Canadian employment figures, while a much stronger-than-expected United States (US) jobs report, released simultaneously, provides additional support to the US Dollar (USD), amplifying the pair's upward momentum.

This section below was published as a preview of the Canada employment report at 09:30 GMT.

• Canada's Unemployment Rate is expected to remain unchanged at 6.5% in October.
• The Canadian economy is expected to add 13.6K jobs after losing 68.3K in September.
• The employment report could influence expectations for further Bank of Canada interest rate hikes.

Statistics Canada will release its October Labour Force Survey on Friday at 13:30 GMT, with markets anticipating a modest recovery in employment following September's sharp decline. The Unemployment Rate will also be closely watched, as the latest figures could influence the Canadian Dollar (CAD). The report comes as the Canadian labour market continues to face uncertainty surrounding United States (US) tariffs, which have weighed on hiring prospects in trade-sensitive industries. Investors will closely monitor whether employment conditions are stabilizing after the economy shed nearly 110K jobs over August and September. 

Royal Bank of Canada (RBC) notes that September's employment decline was largely concentrated in public-sector positions, particularly education and healthcare, rather than industries directly exposed to US tariffs. RBC also highlights early signs of improving hiring demand in October, suggesting that trade restrictions may have stalled the labour market's recovery without triggering a broader deterioration.

The employment figures take on particular importance after the Bank of Canada (BoC) raised its benchmark interest rate on October 28, marking its first increase in more than three years. Although the central bank has left the door open to additional monetary tightening, future decisions will depend on incoming economic growth and inflation data.

Against this backdrop, a stronger-than-expected employment report could reinforce expectations of further BoC interest rate hikes, particularly if accompanied by resilient wage growth. Conversely, another disappointing reading could raise concerns about the Canadian economy's ability to withstand ongoing trade tensions and encourage policymakers to adopt a more cautious approach.

What can we expect from Canada's Unemployment Rate and jobs report?

Consensus among analysts sees Canada's Unemployment Rate holding steady at 6.5% in October. Additionally, analysts expect the economy to add around 13.6K jobs, partially reversing the substantial 68.3K decline recorded in September.

RBC anticipates a slightly stronger increase of 15K jobs and a modest decline in the Unemployment Rate to 6.4%. The bank argues that the impact of US tariffs remains concentrated in directly affected sectors, while more than 80% of Canadian exports to the US continue to benefit from duty-free access under the United States-Mexico-Canada Agreement (USMCA).

Beyond the headline figures, market participants will pay particular attention to manufacturing employment, full-time positions, wage growth and the participation rate to assess whether the Canadian labour market is showing signs of stabilization.

When is Canada’s October Unemployment Rate released, and how could it affect USD/CAD?

Statistics Canada will publish its October employment report on Friday at 13:30 GMT. A stronger-than-expected reading could provide support to the Canadian Dollar, particularly if accompanied by a decline in unemployment and stronger wage growth, reinforcing expectations of further monetary tightening from the BoC.

Conversely, another disappointing employment report could weigh on the Loonie by reducing expectations of additional interest rate hikes, particularly if employment losses extend beyond sectors directly affected by US trade restrictions.

The simultaneous release of the US employment report could also amplify volatility in the USD/CAD pair, as investors assess the relative strength of the two labour markets and the implications for monetary policy.

USD/CAD trades with a positive bias around 1.4070 on Friday, supported by a firmer US Dollar (USD) amid cautious market sentiment ahead of the employment reports from both countries.

On the one-hour chart, USD/CAD holds a constructive near-term bias as price sits above the 100-period and 200-period Simple Moving Averages (SMAs) clustered just under 1.4000, while testing a horizontal pivot resistance at 1.4070. The Relative Strength Index (14) is deeply overbought near 82, hinting that upside momentum is strong but increasingly stretched as the pair presses higher.

On the topside, a clear breakout above 1.4070 would shift focus to the immediate resistance at 1.4115, where a horizontal barrier may cap further gains if buyers fail to extend the breakout. On the downside, the first layer of support is the psychological backing around 1.4000, followed by the 200-period SMA near 1.3993, with the 100-period SMA around 1.3981 and the 1.3930 horizontal level providing a deeper demand zone if a corrective pullback unfolds.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Nonfarm Payrolls (NFP) in the United States (US) rose by 165K in October, the US Bureau of Labor Statistics (BLS) reported on Friday. This print followed the 60K increase recorded in September (revised from 29K) and surpassed the market expectation of 65K by a wide margin.

In this period the Unemployment Rate declined to 4.1% from 4.2%, while the Labor Force Participation Rate improved to 61.9% from 61.8%. Finally, annual wage inflation, as measured by the change in the Average Hourly Earnings, softened to 3.1% from 3.2%.

"The change in total nonfarm payroll employment for August was revised up by 53,000, from +133,000 to +186,000, and the change for September was revised up by 31,000, from +29,000 to +60,000," the BLS noted in its press release. "With these revisions, employment in August and September combined is 84,000 higher than previously reported."

Market reaction to Nonfarm Payrolls data

The US Dollar (USD) gathers strength with the immediate reaction to the impressive Nonfarm Payrolls data. At the time of press, the USD Index was up 0.62% on the day at 102.20.

Developing story, please refresh the page for updates.

This section below was published as a preview of the US Nonfarm Payrolls data at 08:00 GMT.

• US Nonfarm Payrolls are expected to rise by 65K in October, following September’s disappointing 29K increase.
• The Unemployment Rate is forecast to stay unchanged at 4.2%.
• Employment data could influence the US Dollar’s valuation, although markets widely expect a 25 bps rate hike in December.

The United States (US) Bureau of Labor Statistics (BLS) is set to release October Nonfarm Payrolls (NFP) data on Friday at 13:30 GMT. The report is expected to show an increase of 65K jobs, up from 29K in the previous month. 

Even though market participants widely expect the Federal Reserve (Fed) to raise the policy rate by 25 basis points (bps) in December, the underlying details of the employment report could impact how they perceive the policy outlook in early 2027 and drive the US Dollar’s (USD) valuation.

What to expect from the Nonfarm Payrolls report?

Investors expect NFP to rise by 65K in October, following the disappointing 29K increase recorded in September. The Unemployment Rate is forecast to remain unchanged at 4.2%, while the monthly wage inflation, as measured by the change in Average Hourly Earnings (AHE), is projected to rise to 0.3% from 0.1%.

The Fed left the policy rate unchanged at the range of 3.75%-4% after the October policy meeting, as anticipated. In the post-meeting press conference, Fed Chair Kevin Warsh described labor market conditions as “positive,” adding that the discussion among policymakers is focused mainly on the price stability mandate. Hence, a noticeable shift in the market pricing of the Fed rate decision next month is unlikely unless there is a significant negative surprise in the employment data.

According to TD Securities, the US Dollar’s sharp rally since September is likely to give way to a period of consolidation into year-end. The bank reiterates that “after a sharp rally since September, our base case has been for the USD to see a modest relief selloff into year-end, similar to how the USD had performed following the 2018 US midterm election.” Strategists argue that incoming labour market data could be pivotal, noting that “a lower-than-consensus payrolls number could provide an additional catalyst for the USD retracement to take shape.” In that context, they “expect October NFP to remain subdued at 40k after job gains moderated to 29k in September,” reinforcing the view that softer US data would help extend the Dollar’s post-election pullback.  

How will the US October Nonfarm Payrolls affect EUR/USD?

The US Dollar came under heavy selling pressure midweek after Democrats won the Senate and the House in midterm elections, taking control of the US Congress in the last two years of Donald Trump's presidency. Growing optimism about a de-escalation of the conflict in the Middle East following the elections outcome triggered a sharp selloff in crude Oil prices as well, easing fears over persistent inflation. 

Analysts at ING argue that the scope for a deeper Dollar correction remains constrained in the near term, pointing to “a still-resilient US economy and at least one more rate hike from the Federal Reserve” as key supports. However, they also flag that the balance of risks could shift over the medium term, warning that “the Dollar could see a little more weakness into 2027, however, if an emboldened Democratic Party takes greater issue with Republican policy, including deregulation and the AI build-out.” 

A disappointing NFP print at or below 30K could exacerbate the USD selloff heading into the weekend as it could cause markets to dismiss a Fed rate hike in January, which currently has a probability of around 20%, according to the CME FedWatch Tool. In this scenario, EUR/USD could build on its weekly gains.

Conversely, a considerable positive surprise, with an NFP reading above 80K, could support the USD with the immediate reaction and cause EUR/USD to correct lower. Nevertheless, investors could refrain from taking large positions ahead of next week’s US key inflation data, preventing the employment data from having a lasting positive effect on the USD.

Eren Sengezer, European Session Lead Analyst at FXStreet, offers a brief technical outlook for EUR/USD: 

“The near-term technical outlook suggests that EUR/USD is struggling to complete a bullish reversal. The pair holds above the 20-day Simple Moving Average (SMA) but the Relative Strength Index (RSI) indicator on the daily chart stays slightly below 50."

“On the upside, 1.1350 (static level, 50-day Simple Moving Average (SMA), former support) aligns as the first resistance level ahead of 1.1420 (100-day SMA). A daily close above the latter could attract technical buyers and open the door for an extended bullish action toward 1.1540 (200-day SMA).”

“Looking south, the first support level could be spotted at 1.1130 (lower arm of the Bollinger Bands) before 1.1000 (static level, round level).”

• GBP/JPY trades lower as the AI-led equity rout drives demand for the Japanese Yen.
• Falling JGB yields widen Japan's yield disadvantage, keeping Yen gains in check.
• Both the BoE and BoJ maintain hawkish policy outlooks amid persistent inflation risks.

GBP/JPY trades with a mild bearish bias on Friday as investors favour the safe-haven Japanese Yen (JPY) over the British Pound (GBP) amid a deepening AI-led stock-market rout. However, the risk-off mood also boosts demand for Japanese government bonds, pushing yields lower and keeping the Yen’s gains in check.

At the time of writing, GBP/JPY trades around 212 after hitting an intraday low of 211.36.

Japan’s benchmark 10-year government bond yield falls to a four-month low, trading around 2.63%, down 4.70% on the day. The Yen already faces a yield disadvantage due to Japan’s lower interest rates compared with major peers, and falling bond yields add to that pressure.

The Bank of Japan (BoJ) has been gradually raising interest rates, taking its policy rate to 1.25% with a 25-basis-point hike in September before pausing in October. Policymakers continue to signal further tightening, with minutes of the September meeting, released on Thursday, showing that members agreed to keep raising rates and gradually reduce monetary easing.

One member said the BoJ would need to speed up rate hikes if inflation showed signs of overshooting expectations. Many members also warned that rising crude Oil prices keep upside risks to inflation high.

On the UK side, the Bank of England (BoE) raised its benchmark interest rate by 25 basis points to 4% on Thursday in an 8–1 vote. External MPC member Catherine Mann favoured a larger 50-basis-point increase to 4.25%.

The move marks the BoE’s first rate hike since 2023, joining other major central banks in tightening policy to contain inflation fuelled by higher energy costs linked to the war in the Middle East.

Pound support underpinned as BoE hawkishness keeps UK yields elevated

Analysts at MUFG note that “UK yields have held up better than in other major economies” as investors respond to the “hawkish message from the BoE signalling that at least one more hike is likely in the current tightening cycle.” They highlight that Governor Bailey “stated clearly that there was a strong case for another rate hike if the US-Iran conflict is not resolved,” reinforcing expectations that policy tightening has further to run. MUFG concludes that “overall, today’s hawkish BoE policy update should reinforce the GBP’s bullish momentum heading into year-end.”