The Mexican peso strengthened to around 18.6 per USD in November, recovering from a slump triggered by Banxico’s unexpected cut of its benchmark rate to 6.25%. The narrower rate differential with the US Federal Reserve reduces the appeal of peso-denominated carry trades, weighing on the currency. Banxico also revised its forward guidance, signaling that rates would remain at the new level for an “extended period.” The peso partially recovered after the post-decision move amid optimism over US-Mexico trade talks. Democrats won a majority of congressional seats in the US midterm elections; a Democratic majority could constrain some of President Trump’s trade policy decisions. While USMCA-compliant goods were exempted from Trump administration tariffs, additional tariffs remained on steel, aluminum and automotive imports.

Mexican Peso Recovers After Banxico Rate Cut

Sterling fell below $1.335, pulling back from near two-month highs, after a strong US jobs report lifted the dollar. The greenback was already benefiting from safe-haven demand amid a global technology selloff, as sentiment toward AI stocks weakened on concerns that a Democratic sweep in the congressional elections could lead to tighter regulation and slow the industry's expansion. At the same time, markets continued to digest the implications of the Bank of England's policy decision on Thursday, where the central bank raised interest rates for the first time in more than three years. Governor Andrew Bailey indicated that further increases may be required unless the war in Iran comes to an end. In response, investors have ramped up expectations for additional monetary tightening, with three more rate hikes now fully priced in by November 2027. The central bank also warned that inflation could peak at 4.9% in Q2 2027, while its adverse scenario envisages a sharper rise to 6.2% in Q3.

Pound Slides as US Jobs Data Fuels Dollar Rally

The euro extended its losses, falling below $1.115 and approaching its weakest level in several months, as a stronger-than-expected US jobs report lifted the dollar. The greenback was already benefiting from safe-haven demand amid a global technology selloff, as sentiment towards AI stocks weakened on concerns that a Democratic sweep in the congressional elections could lead to tighter regulation and slow the industry's expansion. Meanwhile, ECB President Christine Lagarde said on Thursday that the ECB was monitoring incoming data to determine whether a rate hike would be warranted next month. Although the central bank kept interest rates unchanged in October, several policymakers, including the heads of the German and Italian central banks, have indicated that a December increase may be likely. Eurozone inflation rose to a three-year high of 4% in October, driven by higher energy costs, adding to the case for further monetary tightening.

Euro Extends Losses as Strong US Jobs Data Bolsters Dollar

The Brazilian real weakened to around 5.53 per USD in November as stronger-than-expected US jobs data strengthened the dollar against a basket of currencies. Nonfarm payrolls increased by 165,000 last month, topping all forecasts, and the unemployment rate edged lower. The stronger figures reinforced expectations that the Federal Reserve will maintain a restrictive monetary stance. A narrower interest-rate differential between Brazil and the US would pressure the real by reducing carry trade. Meanwhile, the BCB held the Selic rate at 13.75%, pausing its easing cycle. However, the decision reflected a challenging outlook marked by weaker growth, higher inflation, and increased fiscal uncertainty following Lula’s reelection. Brazilian labor market data also pointed to cooling activity: Brazil created 121,305 formal jobs in September, below market expectations of 171,000.

BRL Under Pressure on Narrowing US-Brazil Rate Differential Bets

The Canadian dollar weakened to near 1.41 per USD in November following weaker-than-expected domestic jobs data and stronger US employment figures. Canadian employment fell by 4,700 in October, improving from September’s 68,300 decline but missing forecasts for a 13,600 increase. Private-sector employment dropped by 53,000 (-0.4%), its first decline since February. A softer labor market could prompt the BoC to cut rates to support economic activity and encourage hiring, reducing the appeal of Canadian assets. However, Canada’s GDP grew 0.8% in Q2 2026, following a 0.1% expansion in Q1. Meanwhile, US nonfarm payrolls increased by 165,000, beating expectations and reinforcing prospects for a wider US-Canada interest-rate differential, supporting the greenback against the loonie. At its latest meeting, the BoC raised rates by 25 bps to 2.5%, its first hike since 2023. Annual inflation reached 3.1% in September, below forecasts of 3.2%.

Canadian Dollar Weakens on Soft Jobs Data

The US dollar index rose 0.6% to 102.2 on Friday, extending gains after October employment data significantly exceeded expectations. Nonfarm payrolls increased by 165,000, more than double the 65,000 forecast, while the unemployment rate edged down to 4.1%. Job gains were broad-based, led by professional and business services and healthcare, reinforcing evidence of a resilient labour market supported by consumer spending and business investment. The stronger figures strengthened expectations that the Federal Reserve will maintain a restrictive monetary stance, with investors anticipating another interest rate increase in December to contain inflation. Policymakers will receive one more employment report and a full set of inflation data before their next meeting. The dollar also benefited from increased safe-haven demand amid a global equity selloff driven by concerns over AI valuations and tighter regulation.

DXY Extends Gains After Strong Jobs Report

The Mexican peso strengthened to around 18.7 per USD in November after slumping following Banxico’s unexpected decision to cut its benchmark interest rate to 6.25%. The narrower interest-rate differential with the US Federal Reserve reduces the appeal of peso-denominated carry trades, weighing on the currency. Banxico also revised its forward guidance, signaling that rates would remain at the new level for an “extended period.” The peso partially recovered despite heightened global uncertainty following a sharp selloff in technology stocks and increased demand for safe-haven assets. Meanwhile, recent preliminary estimates showed Mexico’s economy grew 0.9% in Q3 from the previous quarter, beating expectations of 0.7%. Banxico also revised its headline inflation forecasts higher for Q4 2026, while slightly raising its core inflation projections.

Mexican Peso Rebounds Despite Global Risk Aversion

The Brazilian real traded little changed around 5.50 per USD after weakening nearly 0.7% on November 5th amid heightened risk aversion across global markets. Pressure stemmed mainly from Wall Street, where AI stocks suffered steep losses. The selloff prompted investors to reduce exposure to riskier assets, including emerging-market currencies, and seek shelter in the US dollar. Domestically, fiscal conditions remain in focus as investors and business leaders press the government for further adjustments and await details of President Lula’s fourth-term economic agenda. Meanwhile, the BCB held the Selic rate at 13.75%, pausing its easing cycle and providing some support to the real by maintaining a wide interest-rate differential with the US. However, the decision reflected a challenging outlook marked by weaker growth, higher inflation and increased uncertainty following Lula’s reelection.

Brazilian Real at 5.50 Amid Global Risk Aversion

The Canadian dollar weakened past 1.40 per USD, retreating from the two-month high of 1.39 reached on November 4th, as the US dollar gained on safe-haven demand following a sharp selloff in US equities. The Democrats won majorities in both chambers of the US Congress in the midterm elections, fueling concerns over tighter AI infrastructure regulations. Markets are also cautious ahead of employment reports from Canada and the US. Canadian employment is expected to rise by 13.6 thousand in October, following a 68.3 thousand decline in September, which was the steepest drop in seven months and well below expectations for a 7 thousand increase. The data may offer clues on the BoC’s policy outlook. At its latest meeting, the BoC raised rates by 25 bps to 2.5%, its first hike since 2023, as expected. Policymakers also raised their inflation and growth forecasts. Annual inflation reached 3.1% in September, its highest since May’s 3.2%, but below the 3.2% forecast.

Canadian Dollar Weakens on US Dollar Safe Heaven Demand

The dollar index rose to 102 on Friday, its highest level in a week, partially reversing losses from the previous two sessions as traders awaited the key US jobs report and assessed a global equity sell-off. Demand for safe-haven assets increased amid the equity rout and growing concerns over the AI trade and elevated capital expenditure, as investors weighed the prospect of a more restrictive regulatory environment under a Democratic-led Congress. Meanwhile, expectations that the jobs report would point to a stable labour market, while reinforcing the view that employment conditions were not a source of inflationary pressure, provided further support to the greenback. Markets are currently pricing in around a 71% probability of a 25bps Fed rate hike in December. The dollar posted its strongest gains against the euro, British pound and Japanese yen. Despite Friday's advance, however, the dollar remains down 0.3% for the week.

Dollar Index Rebounds

The euro fell back below $1.12, retreating from one-month highs, as a global tech selloff revived demand for the safe-haven USD. Sentiment toward AI stocks weakened amid concerns that a Democratic sweep in the congressional elections could bring tighter regulation, slowing the industry's expansion. Meanwhile, investors continued to assess the European Central Bank's policy outlook. President Christine Lagarde said on Thursday that the ECB was monitoring incoming data to determine whether a rate hike would be warranted next month. Although the central bank held its deposit rate at 2.5% last week, several policymakers, including the heads of the German and Italian central banks, have signaled that a December increase may be likely. Eurozone inflation climbed to a three-year high of 4% in October, driven by energy costs, strengthening the case for further tightening. Money markets are currently pricing in two rate hikes by mid-2027, with the first potentially coming as early as December.

Euro Slips as Dollar Demand Rises

Sterling fell to $1.34 after briefly breaking above $1.35 earlier this week, its highest level since mid-September, as a global tech selloff triggered renewed demand for the safe-haven US dollar. Sentiment toward AI stocks deteriorated amid concerns that a Democratic sweep in the US midterm elections could usher in tighter regulation and curb the industry’s rapid expansion. Meanwhile, markets continued to digest the implications of the Bank of England’s policy decision on Thursday. The BoE raised interest rates for the first time in more than three years, with Governor Andrew Bailey indicating that further increases may be required unless the war in Iran comes to an end. In response, investors have ramped up expectations for further monetary tightening, with three additional rate hikes now fully priced in by November 2027. The central bank also warned that inflation could peak at 4.9% in Q2 2027, while its adverse scenario envisages a sharper rise to 6.2% in Q3.

Sterling Falls as Safe-Haven Dollar Demand Rises

The Indian Rupee touched 94.06 against the USD, the highest since May 2026. Over the past 4 weeks, US Dollar Indian Rupee lost 2.81%, and in the last 12 months, it increased 6.12%.

Indian Rupee Hits 26-week High

The Taiwanese dollar pared its losses, appreciating around 0.7% to 32.8 per US dollar after briefly weakening past the 33 level, its weakest since April 2025. The currency initially came under pressure from a global technology selloff, which weighed on Taiwan's tech-heavy equity market and prompted foreign investors to reduce their holdings of local shares. Concerns that shifting US political priorities following the Democrats' congressional election victory could slow AI investment and hardware spending added to the selling pressure. However, exporter dollar sales and intervention by state-owned banks helped the currency recover from its intraday low. The central bank has also urged exporters to sell their US dollar holdings rather than wait for more favorable exchange rates and confirmed that it intervened in the market last month. Nevertheless, continued equity market weakness and foreign capital outflows are expected to keep the currency volatile.

Taiwan Dollar Reverses Losses

The Indonesian rupiah weakened to around IDR 18,130 per U.S. dollar on Friday, reversing gains in the prior two sessions as the dollar index firmed ahead of October U.S. jobs data. The currency also tracked losses across Asian peers amid shifts in regional forex markets driven by global risk sentiment and tech-sector volatility. Locally, elevated oil prices continued to weigh on the rupiah by raising import costs and straining fiscal conditions, given Indonesia's status as a net oil importer. Corporate dollar demand added pressure, as major firms, including state-owned enterprises, needed to meet offshore debt obligations, settle energy import bills, and fund capital expenditure. Still, the rupiah remained on track for a modest weekly gain, the first rise in four weeks, lifted by October forex reserves reaching a seven-month high. Sentiment also drew support from stronger-than-expected Q3 GDP growth, reinforcing views that Indonesia could achieve its 2026 growth target of around 5.4%.

Rupiah Slips but Eyes First Weekly Gain in 4 Weeks

AUDUSD decreased to 0.69, the lowest since July 2026. Over the past 4 weeks, Australian Dollar US Dollar lost 0.96%, and in the last 12 months, it increased 6.22%.

Australian Dollar Hits 18-week Low

The Japanese yen traded around 157.8 per dollar on Friday after rising for two straight sessions, as data showed that nominal wages in Japan rose at their fastest pace in nearly three decades, strengthening expectations of another Bank of Japan interest rate hike in December. Minutes from the BOJ’s September meeting also suggested that the central bank could accelerate monetary tightening as it assesses the effects of developments in the Middle East, rising AI-related demand and foreign exchange movements. The BOJ raised its policy rate to a 31-year high of 1.25% in September before leaving it unchanged in October, while indicating that underlying inflation had reached its 2% target. The yen also benefited from safe-haven demand amid an intensifying global equity selloff, fueled by concerns over tighter AI industry regulation following a sweeping Democratic victory in the US midterm elections.

Yen Holds Gains on Strong Wage Data

NZDUSD decreased to 0.56, the lowest since April 2025. Over the past 4 weeks, New Zealand Dollar US Dollar lost 0.63%, and in the last 12 months, it decreased 1.02%.

New Zealand Dollar Hits 18-month Low

The New Zealand dollar slipped to $0.558 on Friday after settling 0.5% lower in the previous session as investors braced for the general election on Saturday. Polls show the governing centre-right National Party and opposition centre-left Labour Party neck and neck, with neither having a clear path to victory. This has raised concerns over potentially prolonged coalition negotiations and uncertainty surrounding the next government’s economic and fiscal policies. With neither major party outlining concrete measures to stem the currency’s decline, traders expect the kiwi to remain under pressure. The kiwi has fallen nearly 3% so far this year, making it one of the worst-performing G10 currencies amid sluggish economic growth and a soft labour market. Meanwhile, the Reserve Bank of New Zealand’s unexpected split decision to leave its official cash rate unchanged last week has further clouded the policy outlook and added to the currency’s woes.

New Zealand Dollar Slips Ahead of Election

The US dollar Index climbed to around 101.7 on Friday, finding support as investors braced for the October jobs report that could provide further clues about labor market conditions and influence expectations for Federal Reserve monetary policy. Recent figures showed that private businesses added 86,000 jobs in October, according to ADP data, while initial jobless claims dropped to their lowest level in 57 years. Despite the stronger employment indicators, markets scaled back expectations of a December Fed rate hike to around 68%, down from nearly 83% the previous day. The shift in rate expectations followed a sweeping Democratic victory in the US midterm elections, which triggered a sharp stock market selloff amid concerns over tighter AI industry regulation and a possible slowdown in data center expansion. Meanwhile, investors anticipate that Democrats could push for an end to the Iran conflict, potentially lowering oil prices and easing inflationary pressures.

Dollar Rises Ahead of Key Jobs Report

The Australian dollar fell below $0.70, hitting a three-week low as a sharp technology stock selloff dampened demand for risk-sensitive assets. Often viewed as a proxy for global risk, the currency came under pressure as concerns intensified after the Democrats’ sweeping victory in the US midterm elections raised fears that tighter regulations could slow AI investment. In Australia, uncertainty over the Reserve Bank’s policy path remained in focus after the central bank raised rates for the fifth time this year to an 18-year high. It was met with a closely divided 6–3 vote and less hawkish guidance, boosting expectations that rates had peaked. However, Deputy Governor Andrew Hauser warned that weakening public confidence in the RBA’s ability to control inflation could make disinflation more costly, potentially requiring a more aggressive policy response. Swaps currently imply just a 6% chance of another increase in December, while a quarter-point rate cut is fully priced by year-end.

Australian Dollar Hits 3-Week Low

The Hong Kong Dollar touched 7.84 against the USD, the highest since August 2026. Over the past 4 weeks, US Dollar Hong Kong Dollar lost 0.15%, and in the last 12 months, it increased 0.76%.

Hong Kong Dollar Hits 10-week High

The Mexican peso weakened to around 18.8 per US dollar after Banxico lowered its benchmark interest rate by 25 bps to 6.25% at its November 2026 meeting, defying market expectations for a hold. The central bank noted that the disinflation process had continued and judged that prevailing economic slack would limit the pass-through of exchange rate movements to consumer prices. It also indicated that keeping rates at the new level for an extended period would support inflation convergence towards its target while helping address external macroeconomic challenges. The narrower interest rate differential between Banxico and the US Federal Reserve reduces the attractiveness of peso-denominated carry trades, weighing on the currency. The peso also surrendered some of its gains following the Democratic Party's victory in the US midterm elections, as markets viewed the outcome as a potential constraint on the Trump administration's ability to maintain elevated tariffs on foreign trade.

Mexican Peso Retreats as Banxico Eases Monetary Policy

The Mexican Peso touched 18.94 against the USD, the lowest since August 2025. Over the past 4 weeks, US Dollar Mexican Peso gained 4.08%, and in the last 12 months, it increased 0.74%.

Mexican Peso Hits 15-month Low

The Swiss franc strengthened to 0.81 per USD, holding close to its highest level since mid-September, as a Democratic sweep raised expectations of tighter regulation of the AI buildout and lifted safe-haven demand. It could also lead to a political gridlock and raised the prospect of fiscal restraint in the US. Higher safe-haven demand could prompt traders to unwind franc-funded carry trades, which had benefited from the widening interest rate differential with the US and weighed heavily on the currency. Swiss borrowing costs have remained at the world's lowest for over a year, making the franc an attractive funding currency for higher-yielding investments. The SNB is not expected to raise rates in the near term, further supported by Chair Schlegel’s remarks which reinforced that Swiss inflationary pressures remain contained. Swiss inflation rose in October on higher energy costs and a weaker franc, although the currency's subsequent appreciation could ease imported cost pressures.

Swiss Franc Holds Near 2-Month High

The South Korean Won touched 1353.00 against the USD, the lowest since October 2026. Over the past 4 weeks, US Dollar South Korean Won gained 1.1%, and in the last 12 months, it decreased 6.65%.

South Korean Won Hits 4-week Low

The Brazilian real traded between slight gains and losses around R$5.45 in November, remaining at January lows after the BCB held the Selic rate at 13.75%, pausing its easing cycle. The decision reflected a challenging outlook marked by weaker growth, higher inflation and heightened uncertainty following President Lula’s reelection. Expectations were divided, with some investors anticipating a hold and others pricing in a sixth consecutive 25 bps cut. Policymakers cited rising inflation expectations, increased uncertainty and a “more pronounced deceleration” in economic activity. The elevated interest rate continues to support the real by maintaining a wide yield differential that attracts foreign carry-trade inflows. At the same time, the Copom statement highlighted the economic slowdown and uncertainty surrounding its own projections. Labor market data also pointed to cooling activity, as Brazil created 121,305 formal jobs in September, below market expectations of 171,000.

Real Trades Sideways as BCB Signals Caution on Inflation and Growth

The US dollar index was little changed around 101.6 on Thursday, following a 0.3% decline in the previous session, as investors continued to assess the implications of the Democrats' sweep of Congress for the US economy, trade policy and geopolitical developments in the Middle East. the so-called blue wave has raised expectations of lower federal spending, tax cuts and a potential diplomatic resolution to the conflict with Iran. However, economic and foreign policy decisions remain largely within the President. Meanwhile, investors are looking ahead to Friday's US jobs report for further clues about the health of the labour market. Recent data showed that private businesses added 86K jobs in October, according to the ADP report, while initial jobless claims fell to their lowest level in 57 years. Third-quarter productivity growth also exceeded expectations. Against this backdrop, markets are pricing in an approximately 83% probability of a 25bps Fed rate hike next month.

Dollar Index Little Changed

Sterling held around $1.347, its strongest level since mid-September, after the Bank of England raised its key interest rate by 25 basis points to 4%, marking its first increase in more than three years. The vote was split 8-1, with Catherine Mann dissenting in favour of a larger 50 bps hike. Governor Andrew Bailey signaled that further rate increases may be necessary unless the Iran war is resolved, which would help ease the inflationary pressures that prompted the latest hike. Markets have since increased their bets on further monetary tightening, with three additional rate increases now fully priced in by November 2027. The BoE also warned that inflation could peak at 4.9% in the second quarter of 2027, while its adverse scenario projects a sharper rise to 6.2% in the third quarter of next year. Meanwhile, the pound remained supported by broad US dollar weakness, with the greenback falling to a one-month low following a sweeping Democratic victory in the US midterm elections.

Sterling Holds at Over One-Month High Following BoE Rate Hike

The Indonesian rupiah hovered around IDR 18,080 per U.S. dollar on Thursday, up for a second straight session as the dollar index continued to fall, with traders remaining focused on the implications of Democratic gains in the U.S. midterm elections. Locally, sentiment found support from stronger economic data, with Q3 GDP growth accelerating to 5.47% yoy, beating expectations on resilient private consumption and solid manufacturing output. The 2026 state budget targets 5.4% growth, although Finance Minister Suahasil recently indicated that expansion could slightly exceed the target, reaching 5.5%. Meanwhile, Bank Indonesia's two-stage reserve requirement reduction for conventional commercial banks, from 9% to 8% effective Nov. 1 and further to 7% on Dec. 1, is expected to inject liquidity around IDR 190 trillion into the banking system without compromising rupiah defenses. Traders now await October forex reserves data due Friday, following September's print of a near five-month high.

Rupiah Firms Further After Strong GDP Data

The Indian rupee strengthened to around 94.5 per dollar, reaching a two-week high as a sharp decline in crude oil prices eased concerns over India’s import bill and external balance. Brent crude fell below $100 amid hopes that the US midterm election results could increase pressure for a negotiated end to the Iran conflict, potentially reducing supply-disruption risks and dollar demand from oil importers. At the same time, the Reserve Bank of India’s measures, including a special foreign exchange window for state-owned oil refiners and its FCNR(B) deposit scheme, have helped contain spot-market dollar demand and mobilize foreign currency. However, persistent foreign portfolio outflows and tighter global financial conditions continue to weigh on the currency. Moreover, declining foreign exchange reserves and rising forward dollar liabilities highlight the limitations of continued intervention in addressing India’s underlying external vulnerabilities.

Indian Rupee Extends Gains to Two-Week High

The South Korean won weakened to around 1,342 per dollar, reversing recent gains as heavy foreign selling of domestic equities, particularly semiconductor stocks, increased demand for the US dollar. Foreign investors sold a net KRW 1.26 trillion worth of South Korean shares, while the KOSPI plunged nearly 4% amid concerns that a Democrat-led US Congress could introduce tighter regulations on AI and data centers. The sharp selloff prompted the Korea Exchange to activate a sell-side sidecar, suspending program trading in KOSPI-listed shares for five minutes. Meanwhile, the won's depreciation came despite broader dollar weakness and a record current account surplus of $61.46 billion in September, supported by robust semiconductor exports. Year to date, the won has depreciated by 6.95% against the US dollar.

South Korean Won Weakens on Foreign Outflows

The Japanese yen strengthened past 158 per dollar on Thursday, extending gains for a second consecutive session as minutes from the Bank of Japan's September meeting reinforced expectations of further monetary tightening. One board member indicated that there may be room to accelerate interest rate increases as the central bank assessed the effects of Middle East developments, growing demand linked to artificial intelligence, and foreign exchange movements. The BOJ raised its policy rate to a 31-year high of 1.25% in September before keeping it unchanged in October, while signaling that underlying inflation had reached its 2% target, potentially setting the stage for another rate hike in December. The yen also drew support from a weaker US dollar following Democratic victories in the US midterm elections. The decisive outcome eased political uncertainty and lowered expectations that President Donald Trump would resume military strikes against Iran.

Yen Strengthens on Hawkish BOJ Minutes

The US dollar index declined to around 101.3 on Thursday, extending losses from the previous session as markets continued to evaluate the impact of Democratic gains in the US midterm elections. The decisive outcome eased a source of political uncertainty, supporting a rally in global equity markets, which generally weighs on demand for the greenback. However, AI-related shares came under pressure amid concerns about the potential impact of Democratic control on future data-center investments. The election results also heightened expectations of political gridlock in Washington and reduced the likelihood of President Trump resuming military strikes against Iran. These developments contributed to a sharp decline in oil prices and weakened safe-haven demand for the dollar. Investors are now focused on Friday's key US employment report, with traders currently pricing in a 79% probability of a Federal Reserve rate hike in December.

Dollar Weakens After Democratic Victory

The Australian dollar strengthened above $0.70, recovering from a recent two-week low as a weaker US dollar and improved global risk appetite lifted demand for risk-sensitive currencies. Global markets rallied after Democratic victories in the US midterm elections boosted hopes for progress toward ending the US-Iran conflict, which also triggered a sharp decline in oil prices. In Australia, better-than-expected trade data added support, with the trade surplus widening sharply to its largest in seven months and beating expectations for a deficit. Meanwhile, the Reserve Bank of Australia's latest quarter-point rate hike to 4.85%, its fifth increase this year, continues to provide some yield support. However, a split 6–3 decision and softer policy guidance have raised expectations that the central bank could pause in December. Governor Michele Bullock stressed that further tightening remains uncertain, although persistent inflation risks leave the door open for another increase.

Australian Dollar Rebounds from 2-Week Low

The Philippine peso rose to around 63.2 per US dollar on Thursday, supported by stronger-than-expected inflation data that reinforced expectations of further monetary tightening. Annual headline inflation accelerated to 7.8% in October from 7.2% in September, exceeding forecasts of 7.6% and marking its highest level since February 2023. Core inflation also rose to 5.4% from 4.8%. The acceleration strengthens the case for further Bangko Sentral ng Pilipinas (BSP) rate hikes as policymakers seek to contain price pressures and anchor inflation expectations. The central bank has already raised rates four times this year. Meanwhile, a weaker greenback following Democrats' victories in both chambers of the US Congress provided additional support. Nevertheless, elevated global oil prices continue to pose risks by adding to domestic inflation and increasing the country's import bill and demand for foreign currency, leaving the peso vulnerable despite its latest gains.

Philippine Peso Rises After Hot Inflation Data

The New Zealand dollar edged up to $0.563 on Thursday, extending gains from the previous session as the US dollar weakened further following a decisive victory by Democrats in the US midterm elections. The result eased fears of a disputed election outcome but raised the prospect of political gridlock, potentially limiting President Donald Trump's ability to pursue his plans, including launching fresh military strikes against Iran. The resulting decline in the US dollar more than offset pressure from disappointing domestic jobs data, which prompted investors to scale back bets on a Reserve Bank rate hike in December. Markets are now pricing in less than a 50% chance of a rate increase next month, down from around 75% earlier this week. Attention now turns to New Zealand's general election on Saturday, with opinion polls showing a tight race between the ruling centre-right National-led coalition and opposition parties, led by the centre-left Labour Party.

New Zealand Dollar Extends Gains

The South African rand strengthened to around 16.5 per USD, reaching a two-week high, supported by a weaker US dollar and firmer precious metals prices. The US midterm election results were crucial, with a Democrat victory potentially limiting President policy agenda and external relations. In this regard, the US decision to remove South Africa and Rwanda from AGOA preferences from next year threatens key export sectors, particularly autos and agriculture. Meanwhile, South Africans are voting in local elections, which are expected to test support for the ruling African National Congress (ANC) and could shape future coalition arrangements.

South African Rand at 2-Week High

The Canadian dollar strengthened sharply to 1.39 per USD in November, reaching a more than two-month high as the greenback retreated broadly following Democratic victories in the US midterm elections. The results prompted investors to reassess the outlook for US growth amid tighter scrutiny of AI investment and potential opposition to data-centre development. The loonie also gained on hopes of easing trade tensions between Canada and the US, as a Democratic majority could constrain some of President Trump’s trade policy decisions. The dispute began in February 2025, when Trump announced broad tariffs on Canadian goods, prompting retaliatory measures from Ottawa. While USMCA-compliant goods were later exempted, additional tariffs remained on steel, aluminum and automotive imports. Meanwhile, Canada posted a C$5.4 billion trade surplus in September, its largest since May 2022 and above expectations of C$4.1 billion.

Canadian Dollar Hits Over Two-Month High

EURUSD increased to 1.13, the highest since October 2026. Over the past 4 weeks, Euro US Dollar gained 0.42%, and in the last 12 months, it decreased 1.94%.

Euro Hits 4-week High

The Canadian Dollar touched 1.39 against the USD, the highest since September 2026. Over the past 4 weeks, US Dollar Canadian Dollar lost 2.22%, and in the last 12 months, it decreased 1.17%.

Canadian Dollar Hits 7-week High

The euro extended its gains above $1.125, reaching its strongest level since early October, as investors digested accelerating eurozone inflation while an unexpected sweeping Democratic victory in the US midterm elections weighed on the dollar. Eurozone annual inflation accelerated to 4.0% in October, its highest level since September 2023 and well above the ECB’s 2% target, mainly driven by an energy cost surge. The single currency has also drawn support from increasingly hawkish rhetoric among European Central Bank policymakers. Despite last week’s decision to leave interest rates unchanged, officials signaled that further rate increases may be necessary to contain inflationary pressures and prevent them from spilling over into wages, reinforcing expectations of a tighter monetary policy stance. Meanwhile, the unexpected US election outcome added to pressure on the dollar, while AI stocks and cryptocurrencies also declined amid concerns over tighter regulatory scrutiny.

Euro Climbs to One-Month High

The dollar index fell to 101.3 on Wednesday, the biggest decline in about a month and its lowest level in five weeks, as traders assessed the implications of the Democratic sweep of Congress in the midterm elections. While a Democratic victory raises the prospect of tighter regulatory scrutiny, particularly in the AI sector, it is also expected to limit the scope for further tax cuts and government spending, easing concerns over increased federal borrowing. Additionally, tighter AI regulation could weigh on economic growth and reduce the need for further interest-rate hikes. Markets are currently pricing in a 77% probability of a 25bps Fed rate increase in December, down from 84% a week ago. Meanwhile, the Swiss franc and Japanese yen, both traditionally viewed as safe-haven currencies, were the strongest performers against the greenback, gaining 0.6% and 0.4%, respectively.

Dollar Falls to 5-Week Lows

Sterling extended its recent gains to trade at $1.347, its strongest level since September 15, as investors dumped the US dollar following a sweeping Democratic victory in the midterm elections, with Democrats securing control of both chambers of Congress. The unexpected political shift weighed on the greenback, while AI stocks and cryptocurrencies also declined amid concerns over tighter regulatory scrutiny. Meanwhile, the pound found additional support from expectations that the Bank of England will resume monetary tightening on Thursday, with markets widely anticipating the first interest rate hike since 2023. Mounting inflationary pressures stemming from the Iran war, alongside signs of resilience in the UK economy, have strengthened the case for higher borrowing costs. However, policymakers are expected to push back against market expectations of several additional rate increases next year.

Sterling Climbs as Dollar Weakens on Democratic Election Sweep

The euro rose to $1.124, reaching its strongest level since early October, as investors dumped the US dollar following a sweeping Democratic victory in the midterm elections, with Democrats securing control of both chambers of Congress. The unexpected political shift weighed on the dollar, while AI stocks and cryptocurrencies also fell amid concerns over tighter regulatory scrutiny. Meanwhile, the euro has also drawn support from increasingly hawkish rhetoric among European Central Bank policymakers. Despite last week's decision to leave interest rates unchanged, ECB officials signaled that further rate increases may be necessary to contain inflationary pressures and prevent them from feeding through into wages, reinforcing expectations of a tighter monetary policy stance.

Euro Rises as US Dollar Slides on Election Shock

The offshore yuan slid to around 6.68 per dollar on Wednesday, extending losses for a second consecutive session to a two-week low as investors continued to weigh Beijing’s aggressive move to curb the currency’s sharp rally. The central bank decided to raise the foreign exchange reserve requirement ratio to 6% from 4%, with investors viewing the policy adjustment as one of the central bank's most explicit interventions to date aimed at cooling the yuan's prolonged rally. The currency has appreciated roughly 5% year-to-date, supported by resilient export demand. Reinforcing the downward momentum, the PBOC set Wednesday’s daily midpoint fixing at 6.7180 per dollar, hitting its weakest setting since October 23 and 369 pips weaker than Reuters' expectations of 6.6811 per dollar. Meanwhile, China's Composite PMI fell to a three-month low of 52.0 in October from 52.4 in September, as the Services PMI declined to 50.8 from 51.6 and the Manufacturing PMI edged down to 52.0 from 52.1.

Offshore Yuan Remains Under Pressure

The Indonesian rupiah traded around IDR 18,130 per U.S. dollar on Wednesday, remaining near that level since last week and struggling to strengthen toward the 18,000 mark despite the dollar index falling to a five-week low. The greenback weakened as traders monitored incoming U.S. midterm election results, with early polls pointing to a potentially strong performance by Democrats. Domestic concerns continued to weigh on sentiment, as Finance Minister Suahasil Nazara lowered the 2026 growth projection to 5.4%–5.5% from 5.6%–6%, ahead of Q3 GDP data due Thursday. Growth is expected to slow further yoy from 5.29% in Q2. Meanwhile, higher oil prices, rising imports, and volatile export earnings added to fiscal and external pressures. On the policy front, Bank Indonesia said its currency interventions had been effective, while Governor Destry reaffirmed the central bank's commitment to maintaining an active market presence, with greater reliance on NDFs to reduce costly spot interventions.

Rupiah Stays Weak Near IDR 18,130 Ahead of Q3 GDP Release

The Swiss franc strengthened to 0.81 per USD, its highest level since early September, as initial US midterm results pointing to a Democratic takeover of both chambers of Congress weakened the dollar and boosted demand for safe-haven currencies. Adding to support, Swiss inflation climbed to a nearly three-year high of 1.5% in October, driven by higher imported energy costs. While inflation remains within the SNB’s 0%-2% target range, its acceleration has raised expectations of an earlier rate hike, with markets anticipating a move in early 2027. Meanwhile, increased safe-haven demand could encourage investors to unwind carry trades, supporting further franc gains. Previously, the wide interest rate differential with the US had weighed on the currency, as Switzerland's 0% borrowing costs made the franc an attractive funding currency for investments in higher-yielding assets.

Swiss Franc Hits 2-Month High

The Japanese yen strengthened toward 157.5 per dollar on Wednesday, reversing a two-day decline as the US dollar came under significant pressure after early election polls suggested a possible Democratic takeover of both chambers of Congress. The prospect has heightened political uncertainty in the US, with a potential Democratic sweep raising concerns over stricter AI regulations and increased corporate oversight that could weigh on the country's economic growth outlook. The yen also gained support from safe-haven demand, alongside government bonds, as technology and artificial intelligence stocks faced renewed selling pressure. Meanwhile, investors are looking ahead to Japan’s wage data due later this week for further clues on the Bank of Japan’s monetary policy outlook. Last week, the BOJ kept its benchmark interest rate unchanged at 1.25% but indicated that underlying inflation had reached its 2% target, potentially paving the way for another rate hike as early as December.

Yen Strengthens as US Dollar Weakens

The US dollar index fell below 101.5 on Wednesday, hitting a five-week low as investors monitored incoming midterm election results, with early polls indicating a potentially strong performance by Democrats. Markets are assessing the possibility of Democrats gaining control of both the House of Representatives and the Senate, raising prospects of a political gridlock in Washington and lower government spending. A Democratic sweep could also pave the way for tighter AI regulations and greater corporate oversight, potentially weighing on the economic growth outlook. On the geopolitical front, investors are closely monitoring whether President Trump will resume military strikes against Iran following the election, as both sides continue to struggle to reach a diplomatic settlement. Meanwhile, attention is turning to the closely watched US jobs report due later this week, which could offer fresh indications of labor market strength and shape expectations for Federal Reserve policy.

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