Forex News
Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser speaks at the Sir Leslie Melville Lecture on 'Trust, Expectations and Monetary Policy' at the Australian National University, Canberra during the European trading session on Thursday. His comments explicitly signaled that inflationary pressures are very high.
Additional remarks
Board discussions were very lively at the last meeting.
There was no attempt to do open-mouth operations for the market.
I was trying to say how I see the data.
Don't recognise the picture of board members being driven into a corner at board meetings.
Market reaction
There has been no immediate reaction by the Australian Dollar (AUD) towards comments from RBA's Hauser. As of writing, AUD/USD is up 0.18% to near 0.7013.
RBA FAQs
The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening.
While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar.
Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD.
Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.
Here is what you need to know on Thursday, November 5:
The selling pressure surrounding the US Dollar (USD) following the midterm election result persists on Thursday, with the USD Index extending its slide toward 101.00 in the early European session. Later in the day, the Bank of England (BoE) will announce its monetary policy decisions and Bank of England (BoE) Governor Andrew Bailey will speak on the policy outlook and respond to questions in a press conference starting at 12:30 GMT.
The USD weakened against its major rivals midweek as markets reacted to Democrats winning the majority in both the Senate and the House. Crude Oil prices declined sharply on renewed optimism about a de-escalation of the conflict in the Middle East, and Wall Street's main indexes staged a risk rally following the opening bell. Meanwhile, the data published by Automatic Data Processing (ADP) showed that employment in private sector increased by 86K in October, surpassing the market expectation of 69K. Additionally, the Institute for Supply Management's (ISM) Services Purchasing Managers' Index (PMI) arrived at 54.5, pointing to an expansion at a healthy pace in the service sector's economic activity.
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the weakest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.78% | -0.66% | 0.40% | -0.12% | 0.24% | -0.18% | -1.01% | |
| EUR | 0.78% | 0.09% | 1.12% | 0.63% | 0.94% | 0.60% | -0.26% | |
| GBP | 0.66% | -0.09% | 0.87% | 0.54% | 0.85% | 0.49% | -0.35% | |
| JPY | -0.40% | -1.12% | -0.87% | -0.49% | -0.16% | -0.64% | -1.49% | |
| CAD | 0.12% | -0.63% | -0.54% | 0.49% | 0.35% | -0.14% | -0.88% | |
| AUD | -0.24% | -0.94% | -0.85% | 0.16% | -0.35% | -0.36% | -1.18% | |
| NZD | 0.18% | -0.60% | -0.49% | 0.64% | 0.14% | 0.36% | -0.90% | |
| CHF | 1.01% | 0.26% | 0.35% | 1.49% | 0.88% | 1.18% | 0.90% |
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).
Analysts at Scotiabank suggest that the latest bout of G10 Dollar weakness is best understood as “something of a ‘relief rally’” following recent political and market developments. They argue that the move also marks “a shift in the USD toward the middle of its ‘smile’, in which relative growth and interest rate differentials narrow as the US/USD drift from the edge linked to exceptionalism – with the other edge of the smile tied to sentiment-driven risk aversion.” In their view, this transition away from the extremes of the so‑called Dollar smile helps explain why higher‑beta currencies have been able to outperform as immediate tail risks recede.
GBP/USD gained nearly 0.4% on Wednesday and touched its highest level since mid-September slightly above 1.3500. The pair stays in a consolidation phase at around 1.3480 in the European morning on Thursday. Investors expect the BoE to raise the policy rate by 25 basis points (bps) to 4%.
Societe Generale’s Kit Juckes cautions that Sterling’s recent resilience could prove fragile if the BoE’s communication turns less forceful. He argues that “if the Bank of England’s guidance on Thursday shows any hesitation about how much further they need to go, the Pound could start looking vulnerable,” even though, in his view, “it is probably too early for them to give the appearance of slowing down.”
Gold (XAU/USD) responded positively to the US midterm elections outcome on Wednesday and gained more than 3%. XAU/USD carries its bullish momentum over to Thursday and trades above $4,100, rising about 1.5% in the European morning.
EUR/USD benefits from broad USD weakness and trades in positive territory at around 1.1250 on Thursday. The European economic calendar will feature Producer Price Index data for September later in the day. Additionally, European Central Bank President Christine Lagarde will participate in a discussion at the event titled "New Dialogues for the Future" in Milan, Italy.
USD/JPY registered marginal losses on Wednesday and continues to edge lower toward 158.00 in the European session. In the early trading hours of the Asian session on Friday, September Labor Cash Earnings data from Japan will be watched closely by investors.
BoE FAQs
The Bank of England (BoE) decides monetary policy for the United Kingdom. Its primary goal is to achieve ‘price stability’, or a steady inflation rate of 2%. Its tool for achieving this is via the adjustment of base lending rates. The BoE sets the rate at which it lends to commercial banks and banks lend to each other, determining the level of interest rates in the economy overall. This also impacts the value of the Pound Sterling (GBP).
When inflation is above the Bank of England’s target it responds by raising interest rates, making it more expensive for people and businesses to access credit. This is positive for the Pound Sterling because higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls below target, it is a sign economic growth is slowing, and the BoE will consider lowering interest rates to cheapen credit in the hope businesses will borrow to invest in growth-generating projects – a negative for the Pound Sterling.
In extreme situations, the Bank of England can enact a policy called Quantitative Easing (QE). QE is the process by which the BoE substantially increases the flow of credit in a stuck financial system. QE is a last resort policy when lowering interest rates will not achieve the necessary result. The process of QE involves the BoE printing money to buy assets – usually government or AAA-rated corporate bonds – from banks and other financial institutions. QE usually results in a weaker Pound Sterling.
Quantitative tightening (QT) is the reverse of QE, enacted when the economy is strengthening and inflation starts rising. Whilst in QE the Bank of England (BoE) purchases government and corporate bonds from financial institutions to encourage them to lend; in QT, the BoE stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive for the Pound Sterling.
- NZD/USD attracts some follow-through buying amid a weaker USD, though it lacks bullish conviction.
- The RBNZ’s dovish pause last week caps the NZD as traders keenly await the US NFP report on Friday.
- The mixed technical setup further warrants some caution before positioning for any further upside.
The NZD/USD pair gains positive traction for the second straight day on Thursday, building on the previous day's recovery from the 0.5575 area, or a three-week low. The momentum lifts spot prices to an over one-week high, around the 0.5655-0.5660 zone, during the early European session and is sponsored by a broadly weaker US Dollar (USD).
In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, sinks to a fresh low since late September amid the post-election fallout. A Democratic sweep in the US midterm elections raised worries about a fiscal gridlock, which could limit government spending and lead to slower economic growth. Furthermore, hopes for an end to the Iran war weigh on crude oil prices, easing inflation fears and exerting pressure on US bond yields. This further undermines the buck and offers some support to the NZD/USD pair.
Meanwhile, the New Zealand Dollar (NZD) might struggle to attract strong follow-through buying on the back of the Reserve Bank of New Zealand's (RBN) major dovish surprise to hold the Official Cash Rate (OCR) steady at 2.75% last week. Traders might also refrain from placing aggressive directional bets and opt to wait for the release of the crucial US monthly employment details on Friday. The popularly known US Nonfarm Payrolls (NFP) report will play a key role in driving USD demand and influence the NZD/USD pair.
From a technical perspective, spot prices retain a short-term negative bias following the post-RBNZ breakdown and subsequent failure near the 100-period Simple Moving Average (SMA) on the 4-hour chart. Meanwhile, the Relative Strength Index (14) has eased back to about 55 from recent overbought territory, hinting that bullish momentum is moderating. That said, the Moving Average Convergence Divergence (MACD) histogram holds marginally positive but flat, suggesting fading upside pressure rather than a robust trend.
Hence, it will be prudent to wait for a sustained break and acceptance below the 0.5580-0.5570 horizontal support before positioning for an extension of the recent well-established downward trajectory from the August monthly swing high. On the topside, immediate resistance is located at the 100-period SMA around 0.5649, followed by the 23.6% Fibonacci retracement at 0.5664. A sustained break above these barriers would be needed to challenge the higher Fibonacci caps at 0.5725 (38.2%) and 0.5775 (50%).
(The technical analysis of this story was written with the help of an AI tool. Know more.)
NZD/USD 4-hour chart
RBNZ FAQs
The Reserve Bank of New Zealand (RBNZ) is the country’s central bank. Its economic objectives are achieving and maintaining price stability – achieved when inflation, measured by the Consumer Price Index (CPI), falls within the band of between 1% and 3% – and supporting maximum sustainable employment.
The Reserve Bank of New Zealand’s (RBNZ) Monetary Policy Committee (MPC) decides the appropriate level of the Official Cash Rate (OCR) according to its objectives. When inflation is above target, the bank will attempt to tame it by raising its key OCR, making it more expensive for households and businesses to borrow money and thus cooling the economy. Higher interest rates are generally positive for the New Zealand Dollar (NZD) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken NZD.
Employment is important for the Reserve Bank of New Zealand (RBNZ) because a tight labor market can fuel inflation. The RBNZ’s goal of “maximum sustainable employment” is defined as the highest use of labor resources that can be sustained over time without creating an acceleration in inflation. “When employment is at its maximum sustainable level, there will be low and stable inflation. However, if employment is above the maximum sustainable level for too long, it will eventually cause prices to rise more and more quickly, requiring the MPC to raise interest rates to keep inflation under control,” the bank says.
In extreme situations, the Reserve Bank of New Zealand (RBNZ) can enact a monetary policy tool called Quantitative Easing. QE is the process by which the RBNZ prints local currency and uses it to buy assets – usually government or corporate bonds – from banks and other financial institutions with the aim to increase the domestic money supply and spur economic activity. QE usually results in a weaker New Zealand Dollar (NZD). QE is a last resort when simply lowering interest rates is unlikely to achieve the objectives of the central bank. The RBNZ used it during the Covid-19 pandemic.
- EUR/USD dips below 1.1250, but holds mild daily gains and remains near 0.8% up for the week so far
- German Factory Orders missed expectations, partially offsetting the impulse from risk-on markets and lower Oil prices.
- US ADP employment and Services activity data confirmed the strong momentum of the US economy on Wednesday
The Euro (EUR) appreciated for the second consecutive day against the US Dollar (USD) on Thursday, buoyed by the sharp decline in Oil prices, although it has pulled back from session highs following the release of lower-than-expected German Factory Orders figures. The EUR/USD pair trades just below 1.1250 after pulling back from session highs near 1.1270, but it remains on track to its best weekly performance in three months.
Data released earlier on Thursday showed that German Factory Orders bounced up 4.4% in September, following a 10.1% decline in August but missing market expectations of a 4.8% increase. Year-on-year, orders rose 3.3%, up from August’s 3.2% gain.
US elections send Oil tumbling and give a respite to Eurozone economies
The common currency has been boosted by the sharp decline in Oil prices following the outcome of the US midterm elections. The price of the Brent Oil barrel has plummeted about $20 in the last two days, to levels near $93.00, providing some relief to the Eurozone’s oil-importing economies, amid hopes that the loss of support will force US President Donald Trump to look for an exit from the conflict.
Trump justified the intervention in Iran on Wednesday, but Vice President JD Vance affirmed in a post on X that the war was the main reason for the republican defeat and that President Trump had acknowledged it.
Beyond that, Eurozone preliminary data released on Wednesday revealed that consumer inflation accelerated to a 4% year-on-year pace in October, adding pressure on the European Central Bank (ECB) to keep tightening its monetary policy and providing additional support to the Euro.
In the US, Wednesday’s data added to evidence of the strong economic momentum, but it was unable to lift the US Dollar. ADP Employment figures showed an 86K increase in net jobs in October, beating expectations of a 69K increase. The ISM Services Purchasing Managers Index (PMI) came slightly below expectations but still at levels consistent with solid activity
Economic Indicator
Factory Orders n.s.a. (YoY)
The Factory orders released by the Deutsche Bundesbank is an indicator that includes shipments, inventories, and new and unfilled orders. An increase in the factory order total may indicate an expansion in the German economy and could be an inflationary factor. It is worth noting that the German Factory barely influences, either positively or negatively, the total Eurozone GDP. A high reading is positive (or bullish) for the EUR, while a low reading is negative.
Read more.Last release: Thu Nov 05, 2026 07:00
Frequency: Monthly
Actual: 3.3%
Consensus: -
Previous: 2.7%
Source: Federal Statistics Office of Germany
Economic Indicator
Factory Orders s.a. (MoM)
The Factory orders released by the Deutsche Bundesbank is an indicator that includes shipments, inventories, and new and unfilled orders. An increase in the factory order total may indicate an expansion in the German economy and could be an inflationary factor. It is worth noting that the German Factory barely influences, either positively or negatively, the total Eurozone GDP. A high reading is positive (or bullish) for the EUR, while a low reading is negative.
Read more.Last release: Thu Nov 05, 2026 07:00
Frequency: Monthly
Actual: 4.4%
Consensus: 4.8%
Previous: -10.6%
Source: Federal Statistics Office of Germany
ING analysts Warren Patterson and Ewa Manthey say ICE Brent has sold off sharply after the Democrats’ US midterm sweep, as markets price a potentially quicker end to the Iran war and a fading risk premium. They note softer fundamentals, weakening timespreads and still-tight US product inventories, but argue the speed of the recent decline looks overdone.
Oil risk premium seen eroding further
"Oil markets sold off aggressively yesterday, with ICE Brent settling 8.7% lower on the day and below $95/bbl. Selling pressure has only continued in early morning trading today. The outcome of the US midterm elections, with the Democrats winning both the House and Senate has increased hopes that we could see a quicker end to the war in Iran."
"In the absence of escalation, the oil market is likely to continue to slowly give back the risk premium it built in recent months, with oil flows from the Persian Gulf holding up well. This risk premium could disappear even quicker if there’s some sort of agreement between the US and Iran. Fundamentally, the oil market is looking increasingly softer, reflected in the weakening in the physical market as well as timespreads."
"Inventory data from the EIA yesterday showed that US commercial crude oil inventories fell by 865k barrels over the last week. When including releases from strategic reserves total crude, inventories fell by 1.26m barrels. Meanwhile, changes on the refined product side were even more supportive, particularly for middle distillates."
"Despite refineries increasing their utilisation rates by 1.7 percentage points over the week to 94.5%, distillate fuel oil inventories still fell by 3.57m barrels. This took total distillate stocks below 100m barrels for the first time since 2003. Gasoline inventories also edged lower by 222k barrels."
"How all this plays out is still highly uncertain. Therefore, the degree and speed to which the oil market has sold off seems to be overdone. One would think Trump might want to come away with some accomplishments from this war."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Danske Research Team highlights that broad USD weakened as US bond yields declined following the Democratic sweep in the US midterms and a sharp fall in energy prices. The team also flags modestly hawkish labour market signals from the ADP report, which showed stronger job gains and rising wage growth, potentially supporting the Federal Reserve’s cautious stance.
Broad USD weakens as yields and energy prices fall
"Bond yields declined, while broad USD and NOK weakened following both the stronger-than-expected Democratic sweep in US midterms, and the sharp drop in energy prices."
"Also in the US, the ADP private-sector employment report showed an increase of 86k jobs in October, above the consensus of 69k. The report adds to a run of labour market indicators pointing towards continued solid growth in labour demand ahead of Friday's payrolls data."
"An uptick in job-changer wage growth to its highest since March 2024 suggests labour market conditions are tightening and workers' bargaining power is improving, sending a modestly hawkish signal for the Fed."
"On the wires, we will hear from the Fed's Hammack (voter in 2026, non-voter in 2027), Logan (voter in 2026, non-voter in 2027) and Barkin (non-voter in 2026, voter in 2027). Hammack and Logan have been among the most hawkish FOMC participants, both dissenting from the July decision to leave rates unchanged, with Hammack also dissenting in October. As Barkin will vote next year, it will be interesting to hear whether he signals his view on the October rate decision."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)
Germany's Factory Orders rose in September, suggesting that the country’s manufacturing sector activity gained momentum, according to the official data published by the Federal Statistics Office on Thursday.
Over the month, contracts for goods ‘Made in Germany’ climbed by 4.4% in September after falling by 10.1% in August (revised from -10.6%). Data missed the estimated 4.8% increase.
Germany’s Factory Orders rose by 3.3% year-over-year (YoY) in September, as against the previous increase of 3.2% (revised from 2.7%).
Market reaction
Germany’s Factory Orders data have little to no impact to the Euro (EUR). As of writing, the EUR/USD pair is up 0.28% on the day at 1.1263.
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.
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