The Brazilian real weakened past 5.38 per US dollar as the prospect of earlier rate cuts by the Brazilian central bank and heightened fiscal uncertainty met a stronger US dollar. Finance Minister Haddad’s public push for rate cuts and his comment that 10% real rates “make no sense” while saying inflation will finish the year near 4.55% raised the odds that policy easing could arrive sooner than markets had expected. That would narrow Brazil’s yield advantage, increase political pressure on the Central Bank and raise the premium investors demand to hold Brazilian assets, especially while Congress debates revenue and spending measures. Meanwhile, the dollar regained momentum to May highs after hawkish Fed signals pared expectations for a December rate cut.

Brazilian Real Losses Ground

The Mexican peso weakened past 18.6 per US dollar to eight week lows as local rates are now priced to ease while the dollar regained momentum after markets scaled back bets on an early Fed cut. Domestic data reinforced the pressure, with consumer confidence falling to 46.1 in October and the S&P Global manufacturing PMI remaining below 50 at 49.5, signalling softer household spending and cooling industrial demand. Internationally traders reduced the odds of a December Fed move, which pushed the dollar toward its May highs and raised dollar funding costs for emerging market positions. Expectations that Banxico will begin easing with a 25bp cut to 7.25% this week would narrow Mexico’s yield advantage and curb peso inflows further. Finally the US government shutdown and the resulting data blackout have made markets more dependent on a few headline releases and central bank guidance, increasing the premium on dollar liquidity when new information points to weaker activity.

Mexican Peso Hits 8-Week Low

The South African rand traded around 17.5 per USD, its lowest level since October 10, tracking a decline in prices of precious metals, particularly gold, on reduced expectations of further US rate cuts. Domestically, an interest rate cut at the South African Reserve Bank’s November meeting appears unlikely, with the central bank still prioritizing efforts to pull inflation expectations down to 3%. In July, the central bank signaled that it is implicitly aiming for inflation near the lower bound of its 3%–6% target range. South Africa’s annual inflation rate ticked up to 3.4% in September 2025 from 3.3% in August, but coming slightly below market forecasts of 3.5%. The rand is still up nearly 7% so far this year, supported by subdued inflation, the central bank’s credibility, an improved fiscal outlook and the stability of the coalition government. This is despite the country's slow economic growth and heightened geopolitical risks since President Donald Trump took office.

South African Rand at Over 3-Week Low

The Canadian dollar slipped toward C$1.41 per US dollar, a near seven-month low, as a stronger US dollar and softer domestic data drove dovish bets for the Bank of Canada. After the Fed trimmed rates by 25bp, Chair Powell warned a December cut is far from assured, which pared a nearly certain December rate cut expectation. The BoC also cut 25bp to 2.25% and signaled it was likely the final move in the cycle, but markets have since refocused on weakening activity. Canada’s September GDP is expected to rise 0.1% monthly while August was revised to a 0.3% monthly contraction, the largest monthly drop since December 2022, a pattern consistent with trade frictions and the drag from higher policy rates. Governor Tiff Macklem said the cut was intended to help an economy hit by US tariffs and trade disruption, but he stressed that further cuts are not automatic, warned that protectionism could inflict structural damage, and underlined the Bank’s readiness to respond if the outlook weakens.

Canadian Dollar Drops to 7-Month Lows

The Canadian Dollar touched 1.41 against the USD, the lowest since April 2025. Over the past 4 weeks, US Dollar Canadian Dollar gained 0.98%, and in the last 12 months, it increased 1.77%.

Canadian Dollar Hits 29-week Low

The dollar index traded around 99.8 on Tuesday, nearing its highest level since May, as traders recalibrated expectations for the Fed's rate cut in December following a series of mixed signals from policymakers. Last week, Chair Powell cautioned that a December move “is not a foregone conclusion.” Chicago Fed President Goolsbee said he remains more concerned about inflation than employment, while Governor Cook pointed to rising risks of labor-market weakness. San Francisco Fed President Daly urged officials to “keep an open mind,” and Governor Miran emphasized that policy remains restrictive. Markets now price in roughly a 70% chance of a 25bps cut next month, down from about 90% before last week’s FOMC decision but still above the 60% seen earlier this week. With public data releases limited amid the ongoing government shutdown, investors are now turning their attention to the upcoming ADP employment  report for fresh insights into labor-market conditions.

Dollar Continues to Gain

The British pound fell toward $1.310, its weakest level since April, after Chancellor Rachel Reeves’ speech signaling upcoming tax hikes, while investors awaited Thursday’s Bank of England meeting. Markets now see about a one-in-three chance of a 25-basis-point rate cut this week, up from near zero after softer inflation and other weak economic data, while odds of a cut by December have risen to two-in-three. Reeves, preparing to unveil her budget on November 26, said the UK has endured “years of economic mismanagement” and stressed that fiscal discipline would be central to her plan. She pledged an “iron-clad” commitment to fiscal rules, a message aimed at reassuring investors amid concerns about the size of the fiscal gap. Her comments reinforced expectations of tighter fiscal policy, even as monetary policy may soon ease, weighing further on the pound ahead of the BoE’s closely watched rate decision.

Sterling Weakens to 7-Month Low

The Indonesian rupiah slipped for a second straight session, hovering around 16,700 per dollar, its lowest level since the end of September. The further drop came as the dollar index firmed toward 100, lingering at 3-month highs amid reduced bets for more easing in December. Locally, Bank Indonesia Governor Perry Warjiyo said there is room for a future reduction in the benchmark interest rate, noting that timing would depend on rupiah stability and the effectiveness of previous cuts. The central bank paused its aggressive rate-cut cycle in October after lowering the benchmark rate by 150 basis points since September 2024. Meanwhile, the annual inflation rose to 2.86% in October 2025 from 2.65% in September, the highest since April 2024 but still within Bank Indonesia’s 1.5–3.5% corridor. Meanwhile, Indonesia's Q3 GDP data are due soon, amid concerns that pro-growth initiatives under President Prabowo Subianto could push imports higher, adding pressure to the current account.

Rupiah Extends Decline Ahead of Q3 GDP Readings

The Japanese yen strengthened past 154 per dollar on Tuesday, rebounding slightly from nine-month lows after Finance Minister Satsuki Katayama reiterated that authorities are monitoring rising volatility in foreign exchange markets with a strong sense of urgency, warning against sharp, one-sided currency moves. In March, Katayama had suggested the yen’s fair value was around 120–130 per dollar but has since retracted that view after assuming office. Meanwhile, Prime Minister Sanae Takaichi said Japan has yet to achieve sustainable inflation supported by wage growth, signaling caution toward further rate hikes. She told parliament that consumer inflation remains near 3% due to elevated food prices but noted the country is still “halfway” to achieving stable price growth driven by stronger wages. Last week, the Bank of Japan held rates steady, with Governor Kazuo Ueda cautioning that global trade policies could weigh on growth and corporate earnings.

Yen Rises on Finance Minister Remarks

The South Korean won depreciated to around 1,440 per dollar, extending declines for a fourth day to its weakest level in almost seven months despite higher than expected domestic inflation. Consumer prices in South Korea climbed 2.4% in October, the fastest pace in over a year and exceeding market forecasts, supporting expectations that the Bank of Korea may maintain its policy rate for longer to balance inflation control with growth risks. Inflation has stayed above the Bank of Korea's 2% target for most of 2025, apart from brief dips in May and August, adding to pressure on policymakers to keep a steady stance amid persistent currency weakness. Broader caution over South Korea’s trade and investment outlook lingers in the background, as markets continue to assess the recent tariff deal with the US and its related investment plans. Meanwhile, external pressures from a firm dollar weighed on the won.

South Korean Won Weakens to 7-Month Low

The Indian rupee edged higher around 88.5 per USD, attempting to recover from all-time lows, likely supported by central bank measures. The Reserve Bank of India intervened again to support the currency, focusing on offshore and derivative markets, while thin local liquidity amplified the impact. State-run banks contributed by selling dollars on the central bank’s behalf, reinforcing the RBI’s defense of the 88.80 level, as seen in previous months. Market sentiment remains anchored on the central bank preventing a move past this level, with any signs of weakness expected to trigger rapid repricing. The modest rebound highlights the RBI’s ongoing role in stabilizing the currency amid persistent dollar demand and broad dollar strength. The rupee has also struggled since steep US tariffs on Indian exports were imposed in late August, keeping the currency pinned near record lows in recent sessions.

Rupee Attempts Recovery on Likely RBI Support

The Australian dollar depreciated past $0.652 on Tuesday, marking its fifth consecutive session of losses as the Reserve Bank of Australia kept its benchmark interest rate at 3.60% amid persistent inflation and economic uncertainty. Earlier this year, RBA Governor Michele Bullock has been signaling a “wait-and-see” approach, noting that further policy adjustments would depend on incoming data, particularly inflation returning sustainably to the 2%–3% target range. However, the Q3 CPI complicated this outlook, with both headline and trimmed mean inflation rising more than expected, suggesting that underlying price pressures remain entrenched. The RBA also noted that global uncertainties, including geopolitical risks and trade tensions, could slow demand and weaken domestic labor market conditions. Externally, the Australian dollar came under renewed pressure against the greenback after the Federal Reserve officials adopted a more cautious tone on the timing of potential rate cuts.

Aussie Dollar on 5-Session Decline

The New Zealand dollar weakened to around $0.569, hitting its lowest level since early April, pressured by expectations of additional rate cuts from the Reserve Bank. Markets have almost fully priced in a 25 bps rate reduction in late November, following an earlier 50 bps cut last month, amid weak economic activity and benign inflationary pressures. Traders now await the Q3 labor market report later this week, with the unemployment rate expected to reach a nearly nine-year high, which could further strengthen the case for monetary easing. Elsewhere, subdued manufacturing data from top trading partner China raised risks for Kiwi exports, further weighing on the antipodean currency. A stronger US dollar also dragged on the Kiwi, as Federal Reserve officials signaled caution over additional interest rate cuts.

Kiwi Dollar Hits Near 7-Month Low

The dollar index climbed toward 100 on Tuesday, hovering at three-month highs as Federal Reserve officials signaled caution over further interest rate cuts, prompting traders to trim expectations for additional easing. Fed Governor Lisa Cook acknowledged growing risks in the labor market but stopped short of backing a December cut, while Chicago Fed President Austan Goolsbee said inflation remains his primary concern. Their remarks followed last week’s rate cut, after which Fed Chair Jerome Powell warned that another move in December is not assured. Markets now see about a 65% chance of an additional cut next month, down from 94% a week earlier. Meanwhile, the latest ISM Manufacturing PMI showed a deeper-than-expected contraction and softer price pressures. Investors are now awaiting the ADP employment and Challenger job cuts reports for fresh insights into labor market conditions.

Dollar Firms Up on Fed Caution

The dollar index hovered near three-month highs around 99.9 on Monday, as traders awaited key private-sector data this week expected to provide fresh insight into the labour market and the broader US economy, at a time when the government shutdown has entered its second month with no signs of resolution. The latest ISM Manufacturing PMI pointed to a sharper-than-expected contraction in the manufacturing sector and a slowdown in price pressures. Investors are now watching for the upcoming ADP employment report and Challenger job cuts data for further clues on labour market trends. Market participants are currently pricing in nearly a 70% probability that the Fed will cut the federal funds rate by 25 bps in December, following a cautious tone from Chair Powell at the post-FOMC press conference. The greenback traded mostly higher against the Swiss franc and the Canadian dollar.

Dollar Continues to Strengthen

The euro extended its decline toward $1.15 at the start of November, reaching fresh three-month lows, as investors weighed last week’s key policy decisions and the outlook for interest rates. The confirmation that Eurozone manufacturing activity stabilized in October provided little support for the currency. The European Central Bank left interest rates unchanged while maintaining a relatively optimistic growth outlook for the eurozone and keeping its inflation projection steady. Earlier data showed Eurozone inflation eased to just above the ECB’s 2% target, third-quarter GDP growth exceeded expectations, and October business surveys suggested improving sentiment. Meanwhile, the US dollar strengthened as traders scaled back expectations for additional Federal Reserve rate cuts, following Chair Jerome Powell’s caution that further easing in December is “not a foregone conclusion.”

Euro Falls to Fresh Three-Month Low

The Swiss franc traded around 0.81 per USD, near its lowest since October 9, as the US dollar held firm amid diminishing expectations of additional monetary easing by the Federal Reserve this year. Domestically, Swiss inflation slowed to 0.1% in October from 0.2% in September, while consumer prices fell 0.3% month-over-month, defying forecasts of a smaller 0.1% decline. The softer data challenges the Swiss National Bank’s (SNB) projection that inflation will pick up later this year and into 2026, with the central bank expecting an average rate of 0.4% this quarter. Weak price pressures have renewed speculation of a rate cut, possibly taking policy back below zero as early as next month. However, SNB policymakers remain cautious, wary of destabilizing the financial system, while the franc’s safe-haven strength continues to weigh on inflation by reducing import costs.

Swiss Franc at Over 3-Week Low

The South Korean won hovered around 1,427 per dollar on Monday, edging higher from losses in the previous session as October trade data signaled resilience in exports. South Korea’s trade surplus in October widened sharply to USD 6.06 billion, surpassing market expectations, supported by resilient exports of semiconductors, autos, and shipbuilding products, and weaker-than-expected imports due to fewer working days during the Chuseok holiday. Meanwhile, South Korea’s manufacturing PMI slipped back into contraction in October, reflecting subdued domestic demand, lingering tariff pressures, and higher import costs.

South Korean Won Firms as Trade Surplus Widens

The Indonesian rupiah weakened to around 16,650 per dollar on Monday after holding relatively steady last week. The decline came amid a stronger US dollar, which hovered near a three-month high after the Trump–Xi summit last week aimed at stabilizing bilateral relations. Meanwhile, Federal Reserve Chair Jerome Powell warned that another rate cut in December was not assured amid the ongoing US government shutdown. Domestically, Bank Indonesia signaled room for further easing, citing expectations that inflation would remain moderate through 2026 despite October’s temporary rise to a 1-1/2-year high of 2.86%, which stayed within BI’s 1.5%–3.5% target range. The central bank had paused its aggressive rate-cut cycle in October after lowering its benchmark rate by 150 basis points since September 2024. Meanwhile, strong September trade data cushioned the retreat in local currency, with exports rising 11.4% year-on-year and imports growing at a slower 7.17%.

Rupiah Slips as Dollar Strengthens

The offshore yuan hovered around 7.12 per dollar on Monday, following a two-session decline, as investors weighed disappointing factory activity data against US-China trade developments. A private survey showed that China’s manufacturing PMI slowed more than expected in October, after official data last week indicated that manufacturing activity had contracted for the longest stretch in over nine years. The weak figures could prompt fresh calls for stronger policy support, even as China reached a trade truce with the US. Over the weekend, the White House announced that China would halt new export controls on rare earths and drop investigations into US semiconductor firms as part of a deal under which Washington will pause certain tariffs and cancel a planned 100% levy on Chinese exports. The announcement followed last week’s Trump–Xi summit, which aimed to stabilize bilateral relations.

Offshore Yuan Stabilizes

The Australian dollar edged higher to around $0.654 on Monday, snapping a three-session losing streak as investors awaited the Reserve Bank of Australia’s forthcoming monetary policy decision. The central bank is widely expected to leave interest rates unchanged following three cuts earlier this year, with stronger-than-anticipated inflation data tempering expectations of further monetary easing. Annual headline inflation jumped to 3.2% in Q3 from 2.1% in the previous quarter, while the trimmed mean measure increased to 3% from 2.7%. Meanwhile, Australia’s Monthly Inflation Gauge, compiled by the Melbourne Institute, rose 0.3% month-on-month in October 2025, slightly down from the 0.4% gain in September. Swaps indicate less than a 7% probability of a rate reduction, and market expectations for additional cuts in December and February have also been scaled back.

Aussie Dollar Snaps 3-Day Decline

The Japanese yen held around 154 per dollar in holiday-thinned trade on Monday, hovering at its weakest levels in nine months as the Bank of Japan adopted a cautious approach to interest rate hikes at a time the US Federal Reserve has turned more hawkish. Last week, the BOJ kept rates unchanged, with Governor Kazuo Ueda warning that global trade policies could dampen growth and corporate profits. Although Ueda left open the possibility of a December rate hike, his measured tone disappointed markets. Meanwhile, new Finance Minister Satsuki Katayama clarified that she no longer supports her March view that the yen’s fair value is around 120–130 per dollar, noting her current responsibility for currency policy. Investors now look ahead to key data releases this week including wage and household spending figures.

Yen Holds Decline on Thin Holiday Trading

The dollar index held around 99.8 on Monday, hovering at three-month highs as investors weighed trade developments and awaited key economic data. Over the weekend, the White House announced that China would suspend additional export controls on rare earths and end investigations into US semiconductor firms, in exchange for the US pausing certain tariffs and scrapping a planned 100% levy on Chinese exports. The move followed last week’s landmark summit between Presidents Trump and Xi aimed at stabilizing relations. Meanwhile, the prolonged US government shutdown continued to delay the release of major economic reports, including the monthly jobs data. Still, investors will get insights from private indicators this week such as ADP employment, ISM PMIs, and Michigan sentiment. Last week, the Federal Reserve delivered a widely expected 25 bps rate cut, though Chair Powell cautioned that another cut in December is not guaranteed.

Dollar Holds at 3-Month High

The Brazilian real weakened past 5.39 per US dollar, as a firm US dollar offset otherwise supportive domestic data. The dollar firmed after the Fed’s 25bp cut was accompanied by Chair Powell’s warning that a further reduction in December is far from certain, keeping global funding conditions relatively tight. Domestically, unemployment remained low at 5.6% in the September moving quarter, which supports consumption and tax receipts, adding to hawkish arguments for the Brazilian central bank. However, those domestic positives have been offset by the limited nature of the US–China truce, which markets view as temporary, and by lingering fiscal and policy uncertainty, including failed congressional votes on revenue measures and earlier shifts to IOF rules that have kept some nonresident investors cautious.

Brazilian Real Pressured by USD Strength

The euro eased toward $1.15, its weakest level since late July, as investors assessed remarks from ECB officials and their implications for the central bank’s policy outlook. ECB policymaker François Villeroy de Galhau said the bank’s monetary stance is well positioned but could adjust if risks intensify. His comments followed the ECB’s decision to hold interest rates steady for a third straight meeting, with President Lagarde noting that policy is “in a good place” and signaling limited appetite for further easing after eight quarter-point cuts through June. Other policymakers advocated patience on interest rates, signaling confidence in the current policy stance. Earlier data showed Eurozone inflation cooled to just above the ECB’s 2% target, while third-quarter GDP growth exceeded expectations and October business surveys indicated improving sentiment. Meanwhile, the US dollar strengthened as traders scaled back bets on additional Federal Reserve rate cuts.

Euro Slips to 3-Month Low

The dollar index rose for a third straight session on Friday, approaching 99.8, its highest level since early August, and is on track to finish October up about 1.8%, supported by a more hawkish tone from the Fed. The Fed delivered a widely expected 25bps rate cut but Chair Powell emphasized that a December rate cut is not a foregone conclusion. Market-implied odds of another cut in December dropped sharply to around 63%, from about 90% before the meeting. Meanwhile, the Trump–Xi meeting concluded with the US agreeing to lower tariffs on Chinese goods, while China pledged to curb fentanyl exports, increase US soybean purchases, and pause rare earth export restrictions. Elsewhere, the ongoing US government shutdown showed no signs of resolution, delaying the release of key economic data. The dollar strengthened roughly 4% against the yen following the election of Prime Minister Takaichi. It also gained about 2% against the pound and 1.4% against the euro.

Dollar Set to Close October on a Strong Note

EURUSD decreased to 1.15, the lowest since August 2025. Over the past 4 weeks, Euro US Dollar lost 1.56%, and in the last 12 months, it increased 6.56%.

Euro Hits 12-week Low

The Canadian dollar slipped past C$1.40 per US dollar after a surprisingly weak GDP report pushed markets to price a higher probability of another Bank of Canada rate cut while a firmer US dollar compounded the pressure. Canadian GDP is expected to rise 0.1% monthly in September, while August was revised to a 0.3% monthly contraction, the largest monthly drop since December 2022. That downgrade reflects a stronger response to trade frictions with the United States and the drag from higher BoC policy rates. Markets had largely treated the BoC’s recent cut as priced in and refocused on the Bank’s data dependent guidance as new weakness accumulated, even though inflation remains elevated with headline CPI near 2.4% y/y and the Bank’s trimmed measure close to 3.1%. Meanwhile the US dollar found support after the Fed’s widely anticipated 25bp cut as Chair Powell warned a further move in December is not guaranteed.

Canadian Dollar Loses Ground After GDP Data

The euro traded just below $1.16 at the end of a week filled with economic data releases, central bank meetings, and easing US–China trade tensions. Eurozone inflation eased to 2.1% in October 2025, down from 2.2% in September and moving closer to the ECB’s 2% target. Among major economies, Germany, France, and Italy saw moderating price pressures, while Spain recorded a slight uptick in CPI. GDP grew 0.2% in Q3, slightly above expectations, driven by robust growth in Spain and France, whereas Germany and Italy remained largely flat. On the policy front, the ECB kept interest rates unchanged for a third consecutive meeting, noting that the inflation outlook remains broadly stable. Meanwhile, the Federal Reserve cut rates by 25bps in October, as expected, but Chair Powell signaled caution on further easing, stressing that a December rate cut is not guaranteed.

Euro Steady Near $1.16

The offshore yuan held its decline around 7.11 per dollar on Friday as investors weighed disappointing PMI data and the outcomes from the recent Trump-Xi meeting. China’s manufacturing PMI fell to a six-month low of 49 in October 2025, signaling continued weakness in the industrial sector and fueling expectations of further stimulus to support domestic demand. Meanwhile, the services PMI remained near a ten-month low of 50, reflecting subdued economic momentum amid ongoing property market stress and global trade headwinds. On the trade front, the US and China agreed to extend their temporary trade truce for another year, with the US pausing the “50% rule” on export controls and China suspending rare earth export restrictions. However, China’s readout offered few specifics, suggesting that both sides still need to refine and finalize the agreements, leaving some issues unresolved. For the month, the yuan is still on track for a gain.

Offshore Yuan Holds Decline

The South Korean won traded around 1,430 per dollar, remaining near the six-month low touched last week, as soft economic data strengthened the case for further easing by the central bank. Retail sales fell for the second straight month in September, while industrial output missed forecasts, reinforcing the Bank of Korea’s dovish stance after it signaled further policy easing last week while keeping rates unchanged amid mounting concerns over a property slump and weak exports. The currency also faced pressure from a stronger US dollar, driven by Fed Chair Powell’s hawkish remarks that another rate cut in December is not assured. However, losses were partly offset after Washington and Seoul finalized a trade deal that eased uncertainty for exporters in autos, chips, and shipbuilding, improving sentiment toward South Korea’s growth outlook. The won remained on track for a second straight monthly decline.

South Korean Won Hovers Near 6-Month Low

The Japanese yen hovered near nine-month lows around 154 per dollar on Friday and was on track for a sharp 4% monthly decline, pressured by the election of Prime Minister Sanae Takaichi, who favors expansionary fiscal measures and loose monetary policy. The Bank of Japan also kept rates unchanged this month, with Governor Kazuo Ueda cautioning that global trade policies could slow growth and hurt corporate profits. Meanwhile, new Finance Minister Satsuki Katayama clarified that she no longer stands by her March comments suggesting the yen’s fair value is around 120–130 per dollar, citing her current role overseeing currency policy. Recent data also showed Tokyo’s core inflation rose more than expected in October, complicating the domestic policy outlook. Externally, the yen weakened further as a stronger dollar gained support from reduced expectations of additional Federal Reserve rate cuts.

Yen Set for Steep Monthly Drop

The dollar index held near three-month highs around 99.5 on Friday and was poised to rise nearly 2% for the month as investors dialed back expectations for further Federal Reserve rate cuts. The Fed delivered a widely anticipated quarter-point reduction on Wednesday, but Chair Jerome Powell stressed that another move in December is not guaranteed. Market-implied odds of a December cut fell sharply to about 75% from over 90% before the meeting. Meanwhile, the Trump-Xi meeting ended with the US agreeing to lower tariffs on Chinese goods, while Beijing pledged to curb fentanyl exports, boost US soybean purchases, and pause rare earth export controls. The dollar posted its biggest monthly gains against the yen in October following the election of Prime Minister Sanae Takaichi, who favors expansionary fiscal measures and continued loose monetary policy.

Dollar Heads for Monthly Gain

The Brazilian real weakened past 5.37 per US dollar, amid a strong US dollar offsetting trade developments. Externally, a firmer US dollar driven by lingering expectations that the Federal Reserve may hold rates higher for longer is pressuring the real, while the recent US–China trade truce has offered limited relief. Despite tariff reductions and the suspension of rare-earth export controls, the agreement is largely seen as temporary and maintaining the status quo, leaving uncertainty over global trade flows and Brazil’s export outlook. Domestically, although the Central Bank of Brazil has maintained a hawkish stance with high policy rates, inflationary pressures remain contained, limiting further yield support for the currency. Additionally, external risks such as ongoing trade and tariff frictions, combined with elevated fiscal uncertainty and a reliance on commodity exports, are sustaining a cautious environment.

The Canadian dollar weakened toward C$1.4 per US dollar, as a firm US dollar driven by growing bets that the Federal Reserve will keep policy rates higher for longer overwhelmed any short-lived hawkish signals from the Bank of Canada. Markets largely treated the BoC’s recent cut as priced in and shifted instead to its data dependent guidance, which narrowed the odds of further accommodation and pushed domestic yields up but not enough to compensate for the dollar’s strength. At home a weak macro backdrop compounds the pressure with Q2 GDP contracting about 1.6% and the labour market softening despite a one off 60,000 payroll gain that left unemployment near 7.1%, while inflation remains elevated with headline CPI around 2.4% year on year and the Bank’s trimmed measure near 3.1%. Softer commodity signals and lingering US Canada trade and tariff frictions together with Ottawa’s outreach to Asia to diversify ties keep external risks elevated and limit the loonie’s external support.

Canadian Dollar Pressured by USD Strength

The dollar index strengthened for a second consecutive session to 99.5 on Thursday, after comments from Fed Chair Powell lowered expectations for further interest rate cuts. The Fed delivered a 25bps reduction as expected on Wednesday, but Powell emphasized that a December rate cut is not a foregone conclusion. Market-implied odds of another cut in December fell sharply to around 68% from about 90% prior to the meeting. Investors had largely anticipated an additional 25bps cut in December, in line with the Fed’s September projections. Meanwhile, the meeting between Presidents Trump and Xi concluded with the US lowering overall tariffs on Chinese imports by 10% to 47%, while Beijing pledged to curb fentanyl exports and increase purchases of US soybeans. These outcomes were broadly anticipated by markets. The greenback gained the most against the yen after the BoJ left interest rates unchanged and speculation grew that the central bank may refrain from additional moves this year.

The Mexican peso slipped past 18.55 per US dollar to near seven week lows as markets priced a more dovish path for Banxico at the same time the US dollar found fresh momentum. Mexico’s GDP contracted 0.3% quarter on quarter in Q3, only the second quarterly contraction since early 2021, after industry output fell roughly 1.5% amid US auto tariffs, services activity stalled and annual growth eased to about 0.2%. The labour market has softened, with the unemployment rate rising to 3.0% in September, its highest since August 2024, and the bulk of the increase concentrated in prime working ages; nearly half of the newly unemployed have been out of work for a month or less, a profile consistent with weakening hiring. At the same time Chair Powell’s comments that a December Fed cut is not guaranteed pushed market odds for another US easing materially lower and lifted the dollar and further pressures the peso.

Mexican Peso Weakens to 7-Week Low

The Euro continued its decline to $1.15, the lowest level since July, pressured by broad dollar strength as investors monitor the monetary policy direction from both the ECB and the Fed. The ECB left interest rates unchanged for a third consecutive meeting as expected and noted that the inflation outlook remains broadly stable, the economy continues to grow and the outlook remains uncertain. As in previous months, policymakers reiterated their commitment to a “data-dependent, meeting-by-meeting approach” to monetary policy. Markets largely expect no further ECB moves this year. On the data front, the Eurozone economy expanded 0.2% in Q3, surpassing expectations of 0.1%, while unemployment remained near record lows. Inflation trends were mixed, with slowing prices in Germany but rising inflation in Spain. Meanwhile, the Fed cut rates by 25bps in October as expected, but Chair Powell sounded cautious on further easing, emphasizing that a December rate cut is not a foregone conclusion.

Euro Hits Three-Month Low

The South African rand weakened to around 17.3 per USD, the lowest level since October 22, as the dollar gained ground following Fed's Powell cautious tone. While policymakers delivered a widely-expected rate cut, Powell noted that a December cut is not guaranteed, prompting investors to trim bets on a December rate cut. Traders also weighed the trade deal made by US President Trump and Chinese President Xi Jinping, given China’s role as a key partner for South Africa. On the domestic data front, PPI inflation mirrored the consumer inflation trend, edging slightly higher in September. Meanwhile, the South African Reserve Bank is likely to maintain its policy rate at 7% at its November 20 meeting to guide inflation toward its new 3% goal.

South African Rand Weakens to Over 1-Week Low

DXY increased to 99.56, the highest since August 2025. Over the past 4 weeks, Dollar Index gained 1.9%, and in the last 12 months, it decreased 4.16%.

Dollar Index Hits 12-week High

The euro edged up to $1.162 as investors digested a mix of economic data and central bank developments. GDP figures showed that Germany and Italy stalled in Q3, while France and the Netherlands expanded at a faster pace. On the inflation front, regional German CPI data pointed to a slight slowdown in price pressures, although inflation accelerated in North Rhine-Westphalia, the country’s most populous state. Meanwhile, Spain’s CPI unexpectedly picked up. Looking at monetary policy, the ECB is expected to hold interest rates steady later today, following the Federal Reserve’s second consecutive rate cut, although Fed Chair Jerome Powell indicated further cuts this year are not guaranteed.

Euro Holds Steady Amid Mixed European Data and Central Bank Moves

The Indian rupee weakened to around 88.6 per USD on Thursday, hitting its lowest level in two weeks, as the US dollar strengthened after Fed Chair Jerome Powell downplayed the likelihood of additional rate cut. The Fed’s relatively hawkish tone further pressured the rupee, already under strain from strong importer demand and NDF-related expiries. The Reserve Bank of India was seen providing support through state-run banks and likely intervening in the offshore market to curb sharp losses. On the policy front, most market participants still expect a December rate cut, with some forecasting further easing in February to bring the repo rate to 5% after recent data showed inflation fell to an eight-year low. Elsewhere, markets weighed the outcome of the Trump-Xi meeting, where the two sides agreed to extend their trade truce for another year.

Indian Rupee Hits Two-Week Low

The offshore yuan fell to around 7.10 per dollar on Thursday, retreating from a near one-year high reached in the earlier session as investors were left underwhelmed by the Trump-Xi meeting. In their first encounter since Trump’s return to office, the two leaders agreed to extend their temporary trade truce for another year, with the US pausing the "50% rule" on export controls and China suspending rare earth export restrictions. Other key highlights of the meeting included the joint commitment of the US and China to address issues such as fentanyl control and the expansion of agricultural trade, along with the constructive resolution of matters related to TikTok. However, while China’s readout adopted an optimistic tone, it offered limited specifics, indicating that both sides must further refine and finalize the agreements, with certain issues still outstanding. Domestically, investors await upcoming PMI data, with official figures due this week and private surveys next.

Offshore Yuan Retreats After Trump-Xi Meeting

The Japanese yen depreciated past 153 per dollar on Thursday, hitting nine-month lows after Bank of Japan Governor Kazuo Ueda said the economy is recovering moderately but cautioned that global trade policies could slow growth and weigh on corporate profits. His remarks followed the central bank’s decision to keep its policy rate unchanged at 0.5%, as expected. The move passed by a 7-2 vote, with board members Naoki Tamura and Hajime Takata again advocating a hike to 0.75%, repeating their stance from September. The BOJ also reiterated it would proceed with policy normalization once its economic projections are met. However, newly elected Prime Minister Sanae Takaichi’s support for accommodative policy complicates the path toward further tightening. The yen also weakened against a stronger dollar after the US Federal Reserve delivered a widely expected quarter-point rate cut, though Chair Jerome Powell emphasized that another move in December was far from a “foregone conclusion.”

Yen Weakens on Ueda Remarks

The Japanese Yen touched 153.28 against the USD, the lowest since February 2025. Over the past 4 weeks, US Dollar Japanese Yen gained 4.1%, and in the last 12 months, it increased 0.76%.

Japanese Yen Hits 37-week Low

The New Zealand dollar climbed back near a three week-high at around $0.577 on Thursday, after slipping 0.3% overnight as the US dollar strengthened on hawkish remarks from Federal Reserve Chair Jerome Powell. While the Fed delivered a widely expected 25bps rate cut on Wednesday, Powell noted that another cut in December “is not a foregone conclusion,” dampening expectations of an extended easing cycle. Attention has now shifted to the highly anticipated meeting between US President Trump and Chinese President Xi in South Korea later today, where investors are hoping for meaningful progress toward a trade deal. Still, upside for the kiwi remains limited by expectations of further monetary easing by the Reserve Bank of New Zealand, with traders pricing in an almost certain 25-bps rate cut in November.

New Zealand Dollar Rebounds

The offshore yuan traded around 7.09 per dollar on Thursday, holding near a one-year high as market sentiment remained upbeat on the back of the meeting between Presidents Donald Trump and Xi Jinping. The encounter marked the first between the two leaders since Trump’s return to office in January, with the pair exchanging handshakes on the sidelines of the APEC Summit in South Korea. Both sides are expected to finalize details of a framework agreement initially negotiated over the weekend in Malaysia, which includes a rollback of select tariffs, fees, and export restrictions. The potential deal has fueled optimism over an easing of trade tensions between Washington and Beijing following months of friction that rattled global markets. Meanwhile, in China, investors are awaiting upcoming PMI releases, with official data due later this week and private surveys scheduled for next week.

Yuan Holds Near 1-Year High on Trump-Xi Meeting

The South Korean won appreciated to around 1,421 per dollar on Thursday, its highest level in two weeks, supported by growing market optimism following the finalization of the Seoul–Washington tariff deal. According to Kim Yong-beom, the presidential chief of staff for policy, the investment package will include $200 billion in cash installments and $150 billion for shipbuilding industry cooperation, with an annual cap of $20 billion. Under the finalized terms, Washington will maintain its reciprocal duties but lower sectoral tariffs on Korean automobiles and auto parts to 15% from 25%, ensuring Korean exporters remain competitive in the US market.  Separately, administrative diplomacy also lifted sentiment, as President Lee Jae Myung prepared to hold summit talks with Canadian Prime Minister Mark Carney on Thursday to discuss economic, security, and technological cooperation.

Won Rises on Seoul–Washington Tariff Deal

The Australian dollar strengthened toward $0.660 on Thursday, recouping some losses from the previous session as investors awaited signals from a key meeting between US President Donald Trump and Chinese President Xi Jinping. Hopes of progress in the talks lifted the risk-sensitive Aussie, with the two leaders expected to formalize a trade truce after months of friction. Further support came from a hotter-than-expected domestic inflation print, which tempered expectations for near-term policy easing by the Reserve Bank of Australia. Markets now assign only about a 5% chance of a rate cut at the November 4 meeting and less than 20% for December, reinforcing speculations that the central bank’s shallow easing cycle may have already ended. Meanwhile, gains were capped by a stronger US dollar after Fed Chair Jerome Powell downplayed the likelihood of another rate cut this year.

Aussie Dollar Firms Ahead of Trump–Xi Meeting

The Japanese yen held around 152.5 per dollar on Thursday, lacking clear direction as investors cautiously awaited the Bank of Japan’s latest policy decision, where it is widely expected to keep interest rates unchanged. Still, policymakers are expected to discuss conditions for resuming rate hikes as tariff-related pressures ease and domestic inflation accelerates. Complicating the outlook further, newly-elected Prime Minister Sanae Takaichi is an advocate of loose monetary policy. On Wednesday, the yen weakened amid a firmer dollar after the US Federal Reserve delivered a widely expected quarter-point rate cut, though Chair Jerome Powell stressed that another move in December was far from a “foregone conclusion,” citing internal divisions and limited federal data due to the shutdown.

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