The offshore yuan held steady around 7.12 per dollar on Wednesday, as markets remained cautious amid developments in US-China trade negotiations. President Donald Trump expressed optimism about securing a favorable deal with Beijing, though he acknowledged that a planned meeting with Chinese President Xi Jinping may not occur. Similarly, US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are scheduled to meet in Malaysia this weekend in a bid to ease bilateral tensions. Their talks are expected to focus on several contentious issues, including China’s restrictions on rare earth exports and Trump’s threat to impose substantially higher tariffs. Meanwhile, the Chinese Communist Party’s Fourth Plenum, which runs through Thursday, is set to chart the country’s next five-year economic development plan. The meeting will also address key internal matters, notably the formal expulsion of Party members who were ousted last Friday on corruption charges.

Offshore Yuan Steady

The Australian dollar remained under pressure below $0.650, holding near two-month lows amid growing bets of a near-term rate cut by the Reserve Bank of Australia. Recent data showed a surprise uptick in the jobless rate to a near four-year high in September, pushing markets to price in a 70% chance of a 25 bps reduction, up from around 40% last week. Attention now turns to upcoming economic data for signals on the central bank’s November move, including flash PMI figures this week and the key Q3 CPI report next week. Meanwhile, the AUD's downside may be limited after a breakthrough between US President Donald Trump and Australian Prime Minister Anthony Albanese, who signed a critical minerals pact aimed at reducing reliance on China and potentially channeling billions of dollars into local mining projects. Markets now closely monitored US-China trade developments ahead of a planned Trump-Xi meeting in South Korea.

Australian Dollar Remains Subdued

The Japanese yen traded around 151.7 per dollar on Wednesday after a sharp fall in the previous session following the election of Sanae Takaichi as prime minister. Markets expect the new leader to pursue an expansionary fiscal policy including higher government spending and possible consumption tax cuts. The Bank of Japan is also seen taking a cautious approach to further rate hikes, with analysts pushing back forecasts for the next increase to early next year. Meanwhile, Japan's new Finance Minister Satsuki Katayama is known for backing a stronger currency. On the economic front, Japan unexpectedly recorded a trade surplus in September as exports rose 4.2% and imports climbed 3.3%, suggesting some relief from US tariff pressures.

Yen Holds Losses on Fiscal Expansion Bets

The dollar index hovered around 98.9 on Wednesday after a sharp rise iin the previous session, as investors weighed the US economic outlook in light of shifting trade dynamics and the ongoing government shutdown. The greenback also drew support from softness in other major currencies, particularly the yen, which weakened on expectations that Japan’s new Prime Minister Sanae Takaichi will pursue expansionary fiscal policies. On trade, President Donald Trump said he remains hopeful for a favorable deal with China but cautioned that his meeting with President Xi Jinping may be delayed. Meanwhile, National Economic Council Director Kevin Hassett suggested recently the shutdown could end this week, offering some relief to markets. Investors now turn their attention to Friday’s CPI report ahead of a widely expected Federal Reserve rate cut next week.

Dollar Holds Advance

The Canadian dollar steadied around 1.4 per US dollar hovering near six-month lows as investors digested hotter-than-expected inflation and fresh trade headlines while the US dollar recovered. Headline consumer prices rose to 2.4% in September versus 2.3% expected, the strongest reading since February. The mean core inflation gauge stayed near one year highs at 3.1% and came in above the 3% consensus, narrowing the Bank of Canada’s room to ease policy. On the trade front, reports that a US–Canada trade pact covering steel, aluminium and energy could be ready for leaders to endorse at the upcoming APEC summit improved near-term export visibility and supported the trade outlook. Meanwhile, the US dollar has rebounded on hopes for the end of the government shutdown and trade agreements hopes with China.

Canadian Dollar Steady After Inflation Data

The British pound fell to around $1.34, its lowest in a week, after data showed the UK government borrowed £7.2 billion more than forecast in the first half of the fiscal year, underscoring the tough fiscal challenge facing Chancellor Rachel Reeves ahead of the November 26 budget. The budget deficit hit £99.8 billion, above the £92.6 billion projected by the OBR, as debt-interest costs surged 66% to £9.7 billion in September, the highest for that month on record. The deterioration, driven by high inflation, rising welfare costs, and weak tax receipts, raises fears that Reeves may need up to £35 billion in spending cuts or tax hikes to meet his fiscal rules. Economists warned that borrowing could reach 5% of GDP this year, complicating fiscal plans and weighing on investor confidence. Meanwhile, the pound also weakened as BoE Governor Andrew Bailey said the economy is operating “below potential” and unemployment rose to 4.8%, reinforcing bets on a rate cut by early 2025.

Sterling Falls as UK Borrowing Exceeds Forecast

The euro slipped slightly to $1.163, as investors turned their attention to a series of European Central Bank speeches this week for clues on the policy outlook. The ECB will enter its pre-meeting blackout period on Thursday, ahead of next week’s rate-setting decision. Meanwhile, the US dollar gained modest support from signs of easing US–China trade tensions and expectations that the US government shutdown will end this week. US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are set to meet in Malaysia to prevent a further escalation of US tariffs on Chinese goods—a stance President Donald Trump recently described as “unsustainable.” In the money markets, traders ramped up bets on policy easing by both the ECB and the Federal Reserve, fully pricing in a 25-basis-point ECB rate cut by July 2026 and two Fed rate cuts by year-end.

Euro Softens as Investors Eye ECB Guidance and US Developments

The South Korean won fell to around 1,423 per dollar on Tuesday, slipping from steady levels in the previous session as investors weighed the firm dollar against the ongoing US–Korea trade discussions. The greenback remained supported as markets looked for indications that the prolonged US government shutdown could soon end and as the tone in US–China relations improved ahead of planned high-level meetings later this month in South Korea. Meanwhile, some optimism persisted after US officials reportedly eased their demand that Seoul make its full USD 350 billion investment commitment in cash, signaling progress in the ongoing trade and investment negotiations. Seoul officials had earlier called for financial safeguards such as a currency-swap arrangement, although this has not been part of the latest talks. Looking ahead, investors are awaiting the Bank of Korea’s policy decision on Thursday for cues on interest rate direction and its assessment of external pressures on the won.

South Korean Won Falls Amid Firm Dollar

The Australian dollar slipped to around $0.650 on Tuesday, breaking a two-day winning streak despite optimism over a breakthrough in the US-Australia trade agreement. The two countries recently signed a critical minerals partnership, with US President Donald Trump and Australian Prime Minister Anthony Albanese positioning the deal as a key step toward reducing American dependence on China. This follows Beijing’s move to tighten export controls on its own critical mineral supplies. Albanese said the agreement takes the US-Australia alliance “to the next level,” noting that while collaboration has been underway since Trump’s first term, this latest deal represents a major step forward in strengthening ties. The funding will support a portfolio of "ready-to-go" projects valued at $8.5 billion (A$13 billion), aimed at expanding Australia’s mining and processing capabilities. Domestically, investors now await flash PMI data, alongside speeches from RBA officials later this week.

Aussie Dollar Slips Despite Trade Deal Optimism

The New Zealand dollar fell to around $0.574 on Tuesday, giving up gains from the previous session, weighed down by expectations of further policy easing by the Reserve Bank. While recent Q3 inflation data showed prices rising to a one-year high of 3%, reaching the upper end of the central bank’s target range, the RBNZ’s preferred inflation gauge held steady at its lowest level since early 2021, and other core measures also pointed to subdued pressures. The central bank had also long anticipated the possibility of inflation breaching its target, making the latest figures a reassuring outcome. Markets remain fully priced in for a 25 bps rate cut in November, with a smaller probability of a 50 bps move. Limiting further losses, sentiment was supported by signs of easing US-China trade tensions, with officials set to meet this week ahead of President Trump’s upcoming talks with President Xi.

New Zealand Dollar Weakens

The offshore yuan inched up around 7.12 per dollar on Tuesday, nearing a four-week high, supported by continued firm central bank guidance and signs of easing US-China trade tensions. The People’s Bank of China set the daily midpoint at 7.093 per dollar, stronger than Monday’s 7.0973 fix and well below the market estimate of 7.1219, signaling continued efforts to anchor the currency ahead of key political events. Optimism also grew after US Treasury Secretary Scott Bessent said he would meet Chinese Vice Premier He Lifeng this week to help prevent a further escalation of tariffs, while President Donald Trump expressed hopes for a “fair trade deal” with President Xi Jinping in their upcoming meeting in South Korea. Attention now turns to the Communist Party’s Fourth Plenum, which runs through Thursday and is expected to outline economic and policy priorities for the coming years. Broader policy adjustments, however, are likely to follow after December’s Central Economic Work Conference.

Offshore Yuan Approaches 4-Week High

The Japanese yen weakened toward 151 per dollar on Tuesday, falling for the third straight session as investors awaited a parliamentary vote expected to confirm Sanae Takaichi as Japan’s next prime minister. The ruling Liberal Democratic Party secured a coalition with the Japan Innovation Party, with both aiming to advance expansionary fiscal policies and spending reforms. Still, uncertainty lingers over the coalition’s stability and whether Takaichi may pursue more hardline policies. The alliance with Ishin could, however, support a more balanced economic and monetary approach. Meanwhile, Bank of Japan board member Hajime Takata said Monday that the time was ripe for raising interest rates, lending some support to the yen. Investors now turn their focus to next week’s BOJ meeting, where policymakers are widely expected to keep rates unchanged.

Yen Slips Ahead of Parliamentary Vote

The dollar index held steady around 98.6 on Tuesday, moving sideways so far this week as investors continued to assess the impact of the ongoing government shutdown, trade-related and monetary policy uncertainty on the US economic outlook. National Economic Council Director Kevin Hassett said the shutdown could end this week, raising hopes of an end to the economically disruptive stoppage. On the trade front, President Donald Trump said he expects to reach a fair trade deal with Chinese President Xi Jinping at a meeting in South Korea later this month. Meanwhile, investors are awaiting Friday’s September CPI report amid limited data releases caused by the shutdown. Markets widely expect the Federal Reserve to deliver a 25-basis-point rate cut next week, with additional reductions likely in December and into next year.

Dollar Holds Steady as US Outlook Mulled

The US dollar index inched marginally higher to 98.5 on Monday as broad weakness for G10 currencies offset the impact of a prolonged government shutdown, uncertainty in US trade, and the outlook of lower rates by the Federal Reserve. The euro edged lower after S&P delivered a surprise rating downgrade for France as its political uncertainty worsens the fiscal backdrop in the Eurozone. The yen was also pressured on the near-confirmation of incoming PM Takaichi, seen as fiscally-dovish. In the meantime, the Fed is still expected to deliver another 25bps rate cut next week ahead of the September CPI report due Friday. The ongoing government shutdown has halted the release of key data that the Fed uses to set policy decisions, but private surveys largely reflect a deterioration in the labor market. Also, Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are set to meet this week in an effort to defuse tensions ahead of a possible Trump-Xi meeting later this month.

US Dollar Hovers Steady at Week Start

The Argentine peso weakened past 1,450 per US dollar and slid back toward its record low of 1,475 from September 19th after a brief recovery as political and policy uncertainty ahead of the October 26th midterms collided with doubts over the size and immediacy of US support, triggering heavy FX outflows, a repricing of devaluation risk and a rush into forward protection. Markets initially cheered talk of a $20 billion swap framework but the deal’s opaque timing and activation conditions, mixed public comments from Washington and a high-profile warning that US help could be contingent on the election outcome undermined that confidence. Even after limited Treasury peso purchases, the official exchange rate and short-dated forwards moved sharply lower, reflecting banks’ and corporates’ hedging and funding stress. Against a fragile reserve position and large near-term external obligations, traders have instead priced a higher chance of a post-election policy shift.

Argentine Peso Back On the Defensive

The Brazilian real strengthened past 5.4 per US dollar, rebounding further from the two-month low of R$5.52 on October 10th driven primarily by an easing of the US–China trade risk premium, alongside a broadly subdued dollar and firmer external demand that improve near-term export prospects. Markets have repriced a lower tariff tail risk after signs of a thaw in bilateral rhetoric and preparatory talks, reducing the likelihood of large trade shocks to commodity flows that underpin Brazil’s current account. At the same time the dollar has stayed subdued amid the US government shutdown and rising odds of Fed rate cuts, trimming dollar funding costs and encouraging cross-border flows into higher-yielding Brazil. Elevated real interest rates relative to peers preserve carry appeal, while stronger Chinese activity and firmer commodity prices bolster expected export receipts.

Brazilian Real Strengthens on Trade Outlook

The South African rand edged up toward 17.3 per USD, amid rising prices of gold and as traders turned their focus to consumer price inflation due this week. Inflation is expected to see a slight acceleration to 3.5% in September from 3.3% in the prior month. Attention was also on a possible removal of South Africa from the Financial Action Taskforce’s “grey” list. The global anti-money laundering watchdog FATF will hold its plenary meeting from Wednesday, 22 October, to Friday, 24 October.

South African Rand Firms

The euro steadied just above $1.165, hovering near its strongest level since October 6, as investors weighed the impact of S&P Global Ratings’ downgrade of France against improving global risk sentiment. S&P cut France’s sovereign rating to A+ from AA-, citing heightened risks to fiscal consolidation and persistent uncertainty surrounding government finances, despite the submission of the 2026 draft budget to parliament. At the same time, risk appetite improved amid signs of easing US-China trade tensions and stabilizing confidence in US regional banks. US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are set to meet in Malaysia this week to avert a potential escalation in US tariffs on Chinese goods, which President Donald Trump described as unsustainable. Meanwhile, investors are awaiting the delayed US inflation data due Friday for further insight into the Federal Reserve’s rate-cut trajectory.

Euro Holds Firm Amid France Downgrade, Trade Optimism

The Indian rupee was little changed to marginally higher around 88 per USD, hovering near a one-month high, as traders weighed the aftereffects of last week’s aggressive Reserve Bank of India interventions, which propelled the currency to its best weekly gain in nearly four months. The central bank’s surprise dollar sales sparked a recovery from record lows, though importer demand trimmed some of that momentum, keeping the rupee range-bound. Sentiment is further influenced by potential US-India trade developments, after President Trump said Prime Minister Modi assured him India would halt Russian crude imports, a pledge not confirmed by New Delhi. With forex markets closed on Tuesday and Wednesday for Diwali holidays, investors will closely monitor any trade headlines and the RBI’s interventions to gauge whether the central bank can sustain the currency’s recent rally. Analysts say a break beyond 88 could trigger fresh long-dollar positions, testing the central bank’s resolve.

Indian Rupee Range-Bound Near 1-Month Highs

The offshore yuan traded flat around 7.12 per dollar on Monday, holding near three-week highs as investors assessed a raft of fresh Chinese economic data. Figures showed the economy slowed for a second straight quarter, expanding at the weakest pace in a year as strong exports partly offset weaker consumer spending and investment. Retail sales growth also moderated and fixed-asset investment posted its first contraction since 2020, underscoring persistent weakness in the property sector. However, industrial production outperformed expectations, highlighting resilience in manufacturing. On the monetary policy front, the People’s Bank of China kept its benchmark lending rates unchanged for a fifth consecutive month, as widely expected, maintaining the one-year and five-year loan prime rates. Markets also took note of easing Sino-US trade tensions, after US President Trump called his proposed tariffs on Chinese goods "not sustainable" as officials prepare for upcoming bilateral talks.

Offshore Yuan Holds Near 3-Week Highs

The Australian dollar strengthened to around $0.650 on Monday, extending gains from the previous session amid optimism over a potential breakthrough in US-Australia trade talks. Prime Minister Anthony Albanese is scheduled to meet with US President Donald Trump in Washington, where he will present Australia’s extensive critical mineral reserves as a key alternative to counter China’s rare earth supply curbs. The Prime Minister is expected to pursue a bilateral accord on critical minerals cooperation, while also reaffirming the United States’ strategic commitment to the AUKUS pact, under which Australia is set to receive support from the US in obtaining nuclear-powered submarines. On the domestic front, investors are closely watching speeches from RBA officials later this week for clues on the direction of monetary policy, especially as expectations for a potential rate cut have intensified following an unexpected rise in the unemployment rate.

Aussie Dollar Gains on Trade Talk Optimism

The New Zealand dollar strengthened to around $0.574 on Monday, recouping losses from the last session, after data showed that inflationary pressures were at its highest in over a year. The Q3 annual inflation rate rose to 3%, reaching the top of the central bank’s 1–3% target band. Still, the increase came in as expected, with analysts noting that the RBNZ had for several months signaled the possibility of Q3 CPI exceeding its target range, making the latest reading a welcome relief for the central bank. The in-line data also showed that underlying measures remained well contained, reinforcing expectations that policymakers will proceed with a rate cut in November. Swaps fully priced in a 25 bps reduction and a slight chance of a larger 50 bps move. Meanwhile, sentiment was further supported by easing US–China trade tensions, which helped reduce risks for New Zealand’s export-reliant economy, though gains were capped by subdued data from key trading partner China.

New Zealand Dollar Strengthens

The South Korean won hovered around 1,421 per dollar on Monday, showing little change from the previous session as a steady greenback tempered optimism over progress in US–Korea tariff talks. The dollar held firm amid easing US–China trade tensions, as officials in Washington and Beijing sought to ease tariff risks ahead of upcoming meetings, while markets awaited the delayed US inflation report due Friday and the Federal Reserve’s expected rate cut next week. Domestically, the presidential chief of staff for policy, Kim Yong-beom, said the government had made substantive progress in ongoing trade negotiations with Washington, which lifted sentiment toward Korean exports and broader trade conditions. Looking ahead, traders are also watching the Bank of Korea’s policy meeting on Wednesday for signals on interest rate direction and its assessment of external risks to the currency.

South Korean Won Little Changed as Dollar Holds Firm

The yen weakened toward 151 per dollar on Monday, extending losses from the prior session as investors prepared for Japan’s leadership vote on Tuesday that will decide the country’s next prime minister. Sentiment was shaped by news that the ruling Liberal Democratic Party and the Japan Innovation Party agreed to form a coalition government, paving the way for Sanae Takaichi to become Japan’s first female premier. The so-called “Takaichi trade,” fueled by expectations of increased fiscal spending and loose monetary policy, spurred buying in Japanese equities while pressuring domestic bonds and the yen. Investors also looked ahead to next week’s Bank of Japan meeting, where policymakers are widely expected to keep rates unchanged. Externally, the safe-haven yen faced selling as risk appetite improved amid signs of easing US-China trade tensions.

Yen Weakens Ahead of Prime Minister Vote

The dollar index steadied around 98.5 on Monday, holding gains from the previous session amid easing US-China trade tensions, with President Donald Trump stating that his proposed retaliatory tariffs on China would not be sustainable. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are set to meet this week in an effort to defuse tensions ahead of a possible Trump-Xi meeting later this month. Investors also awaited the September CPI report due Friday, expected to show inflation remains elevated. Traders are closely watching the report given the ongoing data blackout from the government shutdown. On the monetary policy front, the Federal Reserve is widely expected to cut interest rates by 25 basis points next week, with another reduction seen in December and possibly three more next year, as policymakers weigh softening labor market conditions against persistent price pressures.

Dollar Holds Steady Amid Easing Trade Tensions

The South African rand weakened slightly to around 17.4 per USD, amid an uptick in the US dollar and declining prices of key precious metals, including palladium, platinum and gold. The pullback came as US-China trade concerns eased, with President  Trump calling a proposed 100% tariff on Chinese goods “unsustainable” ahead of his meeting with Chinese President Xi. Meanwhile, local investors shifted their focus to the release of September consumer price inflation next week for clues about inflationary pressures in the country, with analysts anticipating a slight acceleration to 3.5% from 3.2% in August.

South African Rand Weakens

The euro traded just below $1.17 on Friday, hovering near its strongest level since October 6 and heading for a 0.5% weekly gain against the USD, helped by easing political tensions in France and a dovish Fed outlook. In France, Prime Minister Lecornu narrowly survived two consecutive no-confidence votes on Thursday after pledging to suspend a controversial pension reform, averting another government collapse and giving President Macron a brief respite ahead of a tougher battle over the national budget. In the US, Fed policymakers Christopher Waller and Stephen Miran called for further rate cuts to support the labor market, adding to pressure on the dollar, which also faced headwinds from renewed stress in regional banks, persistent US-China trade tensions, and an ongoing government shutdown with no resolution in sight. Markets now expect the Fed to deliver at least two 25-basis-point cuts before year-end, while an 80% probability is priced in for a 25-basis-point ECB cut by July 2026.

Euro Holds Near Two-Week High Amid French Political Relief

The dollar index edged up to 98.4 on Friday after briefly touching 98.03, its lowest level since October 6, as President Donald Trump signaled that the high tariffs on Chinese goods would not remain in place long term. The remarks suggested a potential thaw in US-China trade relations ahead of Trump’s upcoming meeting with Chinese President Xi Jinping. Last week, Trump had threatened to impose an additional 100% tariff on Chinese imports by November 1 after Beijing tightened its rare earth export controls. Despite Friday’s uptick, the greenback was on track for a 0.5% weekly loss, weighed down by the prolonged US government shutdown, renewed concerns over regional banks, and growing expectations of Federal Reserve rate cuts. On Thursday, Fed Governor Christopher Waller said he supports another rate cut this month amid rising labor market risks, while Fed Governor Stephen Miran advocated for more aggressive easing to shore up economic momentum.

Dollar Rebounds Slightly on Trade Hopes

The Turkish lira extended its losses to a new record low of 41.9 per US dollar in October 2025 and is now down about 18% year-to-date, continuing the pattern of gradual and orderly depreciation that began in July 2023, when President Erdogan appointed a more orthodox economic team. The central bank has maintained a strong presence in the foreign exchange market to retain tight control over the currency. At the same time, the government has pursued a policy of so-called “real appreciation,” aiming to ensure that the lira’s nominal depreciation remains slower than consumer inflation. Annual inflation rate in Turkey accelerated for the first time in fifteen months, reaching 33.29% in September, driven largely by higher food prices amid agricultural frost and drought. On the monetary policy front, the Central Bank of Turkey surprised markets by cutting its benchmark interest rate by 250 basis points to 40.5% in September, a steeper reduction than expectations for a smaller move to 41%.

Turkish Lira Sinks Further, Extending Its Losing Streak

The Swiss franc was firmer around 0.79 per USD, its highest since mid-September, as investors flocked to safe-haven assets amid rising concerns over the US financial system after two regional banks reported bad loans. The currency also remained supported by US-China trade tensions, the ongoing US government shutdown, and expectations of Fed rate cuts.

Swiss Franc at 1-Month High

The offshore yuan traded around 7.13 per dollar on Friday, hovering near its highest level in three weeks, as the PBOC continued to guide the currency stronger to preserve market stability ahead of a key Communist Party plenum next week. The central bank lifted its daily reference rate for the third consecutive session to a one-year high, a signal interpreted by investors as a firm policy stance favoring yuan stability. Analysts noted that unlike in past periods of tariff escalations, the yuan has remained relatively steady this year, underscoring Beijing’s determination to prevent excessive depreciation amid renewed trade tensions with Washington. The latest tensions stemmed from new US tariff threats and China’s tighter rare earth export controls, though markets still expect dialogue between Presidents Xi and Trump to proceed later this month. Investors also focused on China’s upcoming third-quarter GDP and other activity data, which could influence future policy stimulus measures.

Offshore Yuan Trades Near 3-Week High

The euro climbed to $1.17, its strongest level since October 6, consolidating gains at the end of a week marked by easing political tensions in France and a weaker US dollar. On Thursday, French Prime Minister Sébastien Lecornu narrowly survived two consecutive no-confidence votes after pledging to suspend a contentious pension reform. The move helped avert another government collapse and offered President Emmanuel Macron a brief reprieve ahead of a potentially tougher battle over the national budget. Meanwhile, the dollar softened as Fed policymakers Christopher Waller and Stephen Miran called for additional rate cuts to support the labor market. The Fed’s dovish tone contrasts sharply with the ECB’s latest projections, which indicate that interest rates will likely remain unchanged in the near term. Ongoing US-China trade tensions and a US government shutdown with no resolution in sight further weighed on the dollar, underscoring the euro’s relative strength.

Euro Strengthens on French Political Relief and Fed Dovishness

The Indian rupee hovered around 88 per USD on Friday, trading sideways near four-week highs, but poised for its strongest weekly gain since late June, after the RBI deliberate intervention turned short sellers cautious. The central bank took a forceful stance against heavy selling pressure, selling dollars through state-run banks. The move helped ease strains on the rupee from steep US tariffs, tighter immigration rules, foreign outflows, and rising gold import costs. Meanwhile, investors weighed mixed signals in US-India trade developments. Relations have been strained since Trump imposed a 50% tariff on Indian goods over New Delhi’s Russian oil purchases, though he signaled a possible resolution on Wednesday, saying Modi had committed to halt such imports. India’s Foreign Ministry, however, said it was unaware of any conversation, while New Delhi maintained that Russian oil imports will continue if economically viable. Officials also said talks with the US are ongoing.

Indian Rupee Set for Strong Weekly Gain

The South Korean won weakened to around 1,420 per dollar on Friday, retracing earlier gains as sentiment softened after the IMF warned that US tariffs could weigh on South Korea’s medium to long-term growth prospects. Thomas Helbling, deputy director of the IMF’s Asia Pacific department, noted that while growth is expected to improve in the near term amid lower political uncertainty and policy support, rising tariffs and lingering uncertainty may gradually weigh on exports and momentum. However, the latest round of US-South Korea trade talks showed signs of progress in the shipbuilding project cooperation. Adding to the cautious tone, the Bank of Korea showed that import prices rose for a third straight month in September, driven by higher oil prices and a weaker currency. The figures point to persistent inflationary pressures from external factors and continued weakness in the won, despite export resilience, with import prices up 0.2% month-on-month, following a 0.3% rise in August.

Won Slips on IMF Warning

The New Zealand dollar hovered around $0.572 on Friday, near Monday’s six-month low of $0.568, amid ongoing US-China trade tensions and a dovish policy outlook at home. Frictions between the two major economies resurfaced after Washington and Beijing clashed over rare earths export controls, prompting investors to flock to safe-haven assets and leaving risk-sensitive currencies like the kiwi on the defensive. Further dampening the kiwi’s appeal, Reserve Bank of New Zealand Chief Economist Paul Conway reiterated on Wednesday that the central bank remains open to further policy easing, though it will assess incoming economic data before deciding. Investors now look ahead to next week’s third-quarter inflation report for further clues on the RBNZ’s rate-cut path. So far this week, the kiwi has traded broadly flat.

New Zealand Dollar Struggles

The Australian dollar weakened to around $0.647 on Friday, extending losses from the previous session amid growing bets on a near-term rate cut by the Reserve Bank of Australia. Futures price in roughly an 85% chance of a 25 bps RBA cut to 3.35% on November 4, up from 50% earlier in the week, with a further drop to 3.10% already fully anticipated. This followed a surprise jump in unemployment and fewer jobs added, signaling a further labor market loosening. However, analysts caution the central bank is likely to wait for the Q3 CPI report before deciding on a rate move. Meanwhile, investors continued to weigh risks from the escalating US-China trade tensions. In the latest update, China accused the US of exaggerating its rare earth export controls, calling the resulting “panic” unnecessary while signaling openness to trade talks. Elsewhere, ongoing weakness in the US dollar pressured by trade frictions, the government shutdown, and a slowing US economy, offered support to AUD.

Australian Dollar Extends Decline

The Japanese yen firmed to around 150.3 per dollar on Friday, nearing two-week highs after Bank of Japan Governor Kazuo Ueda signaled readiness to raise interest rates if confidence in the economic outlook continues to build. Ueda said he would evaluate upcoming data ahead of this month’s policy meeting, suggesting the BOJ has not ruled out a near-term move despite ongoing political uncertainty and risks from US tariffs. Still, markets see only a slim chance of a rate hike at the October meeting. Meanwhile investors remained focused on political developments as opposition parties have yet to agree on the ruling Liberal Democratic Party’s Oct. 21 proposal to hold a vote for a new prime minister. Externally, the yen drew additional support from safe-haven demand and a softer dollar amid escalating US-China trade tensions, the prolonged US government shutdown, and dovish signals from the Federal Reserve.

Yen Strengthens on Hawkish BOJ Signals

The dollar index fell to around 98.2 on Friday and was on track for its biggest weekly decline since July, pressured by intensifying US-China trade tensions, the prolonged US government shutdown, and bets on Federal Reserve interest rate cuts. Credit market risks also weighed on sentiment after two US regional banks disclosed bad loans. China accused the US of deliberately stoking panic over rare earth export controls but signaled willingness to resume trade talks. Meanwhile, the government shutdown entered its third week, delaying key economic data that could guide policy decisions. Fed Governor Christopher Waller said Thursday he supports another rate cut this month amid mounting labor market risks, while Fed Governor Stephen Miran called for more aggressive easing. The Fed’s Beige Book also highlighted emerging economic strains, including rising layoffs and weaker spending among middle- and lower-income households.

Dollar Heads for Weekly Loss

USDTRY increased to an all-time high of 41.93. Over the past 4 weeks, US Dollar Turkish Lira gained 1.57%, and in the last 12 months, it increased 22.51%.

Turkish Lira Hits All-time Low

The Mexican peso strengthened past 18.40 per US dollar, rebounding from a one-month low of about 18.56 on October 10th, as growing expectations of easier Fed policy, underlined by Fed Chair Powell’s comments this week noting signs of labour-market softening, removed some support from the dollar and narrowed the US–Mexico policy differential. At the same time the US government shutdown entered its third week, delaying key US data that might otherwise have anchored rates and market positioning. Domestically, despite Mexico’s annual inflation rising to 3.76% in September, keeping headline inflation comfortably within Banxico’s 2–4% target range and reinforcing the central bank’s willingness to continue easing after its September cut, the rate differential is expected to sustain carry trade demand. Meanwhile, the prospect of the USMCA review next year and Mexico’s tariff advantages versus other trade partners provide additional support.

Mexican Peso Rebounds from 1-Month High

The euro rose to $1.165, moving further away from a two-month low of $1.154 on Tuesday, after France’s government survived a no-confidence vote. Prime Minister Sebastien Lecornu’s pledge to suspend a landmark pension reform secured support from some left-wing lawmakers. Meanwhile, US dollar came under pressure after Fed Chair Jerome Powell highlighted labor market weakness, and Wednesday’s Fed Beige Book confirmed further slowing in the US economy, reinforcing expectations of another rate cut this month. This dovish outlook contrasts with ECB projections, which suggest interest rates are likely to remain unchanged. Meanwhile, US-China trade tensions escalated following China’s expansion of rare earth export controls last week, criticized by senior US officials, though Presidents Trump and Xi Jinping are still expected to meet in South Korea later this month.

Euro Strengthens as France Survives Confidence Vote

The British pound remained above $1.34 after UK GDP data came in line with forecasts, providing some relief to Finance Minister Rachel Reeves ahead of the government’s November 26 budget. The UK economy grew 0.1% in August, rebounding from a 0.1% contraction in July, led by manufacturing, while services were flat for a second month and construction fell. However, an annual expansion of 1.3% is insufficient to offset the need for tax increases. Reeves recently signaled she is considering tax hikes and spending cuts, with the government likely needing to raise around £30 billion amid rising borrowing costs, scrapped welfare cuts, and weaker growth forecasts. On the monetary policy front, traders have increased bets on Bank of England rate cuts next year, even as the IMF cautioned that inflation is expected to remain the highest in the G7 through 2026, advising the BoE to proceed carefully.

Pound Holds Above $1.34 as UK GDP Data Meets Expectations

The New Zealand dollar rose for a second consecutive day to around $0.574 on Thursday, benefiting from broad weakness in the US dollar. The greenback came under pressure amid prospects of Federal Reserve rate cuts, alongside intensifying US-China trade tensions and the ongoing federal government shutdown, which have heightened concerns about the US economic outlook. However, the kiwi’s upside remained limited by a dovish monetary policy outlook at home. Reserve Bank of New Zealand Chief Economist Paul Conway reiterated on Wednesday that the central bank remains open to further policy easing, though it will wait for economic data before making a decision. Markets are currently pricing in another rate cut in November, with rates expected to fall to 2.0% by 2026. Supporting this view, the latest data showed that New Zealand’s annual food inflation eased to a five-month low of 4.1% in September from 5.0% in August.

New Zealand Dollar Gains on Softer US Dollar

The South Korean won strengthened to around 1,417 per dollar on Thursday, extending gains for the second straight session as the dollar weakened on renewed strain in US–China trade relations. Domestically, investor sentiment improved amid signs of progress in high-stakes trade negotiations between Seoul and Washington. Both nations are reported to have moved closer to alignment over implementing South Korea’s $350 billion investment pledge under a trade framework settled on in July. President Donald Trump said Wednesday that Seoul had agreed to make an “upfront payment” of the pledged sum to invest in the US. His remarks came shortly after Treasury Secretary Scott Bessent suggested the two nations were close to resolving key disagreements. Both governments plan to finalize the deal by late October, potentially at the APEC summit in Seoul, where Trump and President Lee are expected to meet.

Won Climbs on Weaker Dollar, US–Korea Trade Momentum

The yen strengthened past 151 per dollar on Thursday, rising for the third straight session as the path for Liberal Democratic Party leader Sanae Takaichi to become the next prime minister remains highly uncertain following the coalition breakup with the Komeito party last week. The ruling party proposed holding a leadership vote on Oct. 21, though opposition parties have not yet agreed to the date. Traders who previously shorted the yen on expectations that Takaichi would pursue aggressive fiscal spending and continued monetary accommodation have since reversed those positions amid growing political uncertainty. Meanwhile, Bank of Japan board member Naoki Tamura cautioned against tightening policy too soon, stressing the need to avoid a return to stagnant prices and wages. Additional support came from safe-haven inflows and a weaker dollar amid escalating US-China trade tensions, the prolonged US government shutdown and dovish signals from the Federal Reserve.

Yen Strengthens on ‘Takaichi Trade’ Unwind

The dollar index fell below 98.5 on Thursday, sliding for the third straight session as escalating US-China trade tensions, the prolonged government shutdown, and expectations of further Federal Reserve rate cuts weighed on the greenback. When asked whether the US would remain in a trade war with China if President Trump and President Xi fail to reach an agreement during their upcoming meeting in South Korea, Trump replied, “We’re in one now.” Still, Treasury Secretary Bessent hinted at the possibility of extending the current trade truce beyond three months if Beijing suspends plans for new export controls on rare earth minerals. Meanwhile, the government shutdown entered its third week, delaying key economic data releases that could inform policy decisions. Fed Chair Powell highlighted signs of labor market weakness in a Tuesday speech, reinforcing market bets on a rate cut this month, another in December, and as many as three more next year.

Dollar Extends Slide for Third Session

The Australian dollar weakened below $0.650 on Thursday, reversing the previous session’s gains, after a softer jobs report revived expectations of an RBA rate cut. The Australian Bureau of Statistics reported that the unemployment rate rose more than expected to 4.5%, the highest in nearly four years, while employment increased by just 14,900, below forecasts for a 20,000 gain. The data signaled further labor market loosening, ramping up bets that the Reserve Bank may resume rate cuts as early as next month. Investors now price in a 71% chance of easing, up from 40% before the release. Attention now turns to third-quarter inflation data due in less than two weeks, which will be key to shaping expectations for the November policy meeting. Governor Michele Bullock earlier noted that stronger consumer spending and higher readings in some parts of inflation had prompted policymakers to reconsider the need for additional rate cuts.

Australian Dollar Slips on Softer Jobs Data

The Indian Rupee touched 87.75 against the USD, the highest since September 2025. Over the past 4 weeks, US Dollar Indian Rupee lost 0.11%, and in the last 12 months, it increased 4.48%.

Indian Rupee Hits 4-week High

The Canadian dollar weakened past 1.4 per US dollar in mid-October to six-month lows, pressured by softer crude prices, slowing domestic data, and expectations of lower Bank of Canada policy rates. Oil, Canada’s largest export, has dropped to five-month lows amid persistent US-China trade tensions, rising supply, and anticipated US inventory builds, raising fears of oversupply and weaker demand and removing a key support for the currency. At the same time, broad economic indicators point to cooling domestic momentum, with GDP growth slowing, core inflation near the lower end of the BoC’s target, and modest wage gains, reducing the case for higher borrowing costs. Recent BoC communications reinforce the likelihood of a rate cut or pause, further diminishing expected returns from holding Canadian assets relative to the US.

Canadian Dollar Weakens to 6-Month Low

The dollar index remained below 99 on Wednesday, as investors assessed recent trade developments and comments from Federal Chair Powell that reinforced expectations of continued interest rate cuts. Treasury Secretary Scott Bessent proposed a longer pause on high US tariffs on Chinese goods in exchange for Beijing delaying its planned restrictions on rare earth exports, offering some relief to investors after recent tensions. The move followed a renewed escalation, with President Trump ultimately threatening a cooking oil embargo in response to China’s soybean boycott. On the monetary policy front, Chair Powell on Tuesday warned of rising risks to employment, strengthening market bets on further easing. The odds of another 25-basis-point Fed rate cut this month currently stand at about 97%. Meanwhile, the euro advanced after France proposed suspending major pension reforms, while the yen strengthened as traders unwound the “Takaichi trade”.

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