Weekly Currency Market Update

Market Summary & Cross-Market Themes

The dollar stayed broadly firm this week as US yields edged higher on resilient US data. Risk appetite was choppy, with equities range-bound and commodities mixed. China’s latest activity signals showed modest stabilization, helping AUD and Asia FX on dips, while policy divergence remained the key driver across G10.

• USD/yields: Front-end US yields nudged up; the US Dollar Index held bid into late week.

• Risk tone: Equities and credit steady but cautious; defensives outperformed cyclicals on mixed data.

• China impulse: Incremental policy support and steadier PMIs aided commodity FX, but momentum remains fragile.

• Policy divergence: Fed/BoC/BoE holding restrictive; ECB gradual easing bias; BoJ cautiously normalizing.

What this means for you (Week ending 2025-11-22)

• Expats: If euro rebounds toward 1.11, consider sending. Split if 1.08–1.10.

• Travelers: Yen near 150–152 looks better value; split above 154.

• SMBs: Pay USD invoices on dips: EUR 1.09–1.10, GBP 1.27–1.28, CAD 1.35–1.36.

Week-in-Review (price moves & drivers)

• USD: Firmer on higher US yields and sturdy data; haven demand mild.

• EUR: Slightly softer vs USD as ECB-speak leaned cautious; data mixed but stabilizing.

• GBP: Range-bound; services inflation sticky kept BoE-hold narrative alive.

• JPY: Weaker as yield spreads widened; verbal support limited; BoJ patience continues.

• AUD: Outperformed on China stabilization hints and steady iron ore.

• NZD: Modestly firmer; risk tone supportive but capped by soft dairy.

• CAD: Little changed; oil steady and BoC patience balanced USD strength.

• SGD: Stable; MAS stance anchoring; Asia risk improved late in week.

Central-Bank Path Updates

• Fed: Data-dependent hold; markets see gradual 2026 easing, no rush near term.

• ECB: Leaning to gentle easing path; monitors wage dynamics and core inflation stickiness.

• BoE: On hold; services inflation and pay growth keep cuts cautious and shallow.

• BoJ: Gradual normalization bias; tolerates higher yields, watches wages and inflation breadth.

• RBA: Hawkish hold; housing and services inflation keep optionality to tighten if needed.

• RBNZ: High-for-longer stance; inflation progress uneven; cuts likely later than peers.

• BoC: Neutral hold; inflation cooling but core sticky; cuts paced with Fed.

• MAS: Hold; slight appreciation bias intact; watches imported inflation and growth.

Data Recap vs Consensus

• US: Activity beat modestly; inflation roughly in line, keeping yields firm.

• Eurozone: PMIs stabilized; core inflation progress slow, supporting gradual ECB stance.

• UK: Services inflation sticky; wage growth elevated vs trend.

• Japan: Inflation steady; activity mixed; BoJ guidance unchanged.

• Australia: Labor and retail resilient; services prices still firm.

• New Zealand: Inflation expectations drifted lower; growth subdued.

• Canada: CPI moderated; retail soft; output mixed.

• Singapore: Non-oil exports improved from lows; price pressures contained.

Large FI Forecasts (Snapshot; next 1–2 quarters)

Forecasts are directional guidance only, not advice.

(Consensus aggregated across Goldman Sachs, JPMorgan, Citi, UBS, HSBC, Barclays, BNP Paribas, Deutsche Bank)

Positioning in the Market

• Most traders are backing the USD against JPY and NZD; EUR positioning closer to neutral.

• Fast squeeze higher in EUR and JPY possible if US data cools suddenly.

• Options demand shows more protection for USD/JPY downside and EUR/USD upside.

Commodities & China/Middle-East Linkages

• Iron ore supported by China construction stabilizing; helps AUD on dips.

• Oil steady as Middle East risks offset by non-OPEC supply; CAD range-bound.

• Dairy prices soft but steady; NZD rallies capped without stronger China demand.

Per-currency: What it means for you

USD

• SMBs: Pay USD invoices if EUR/USD slips under 1.08.

• Expats/Travelers: Split if USD/JPY is above 154; wait toward 150.

EUR

• SMBs: Buy euros on EUR/USD dips to 1.07–1.08; split.

• Expats/Travelers: Wait near 1.11 on EUR/USD to send.

GBP

• SMBs: Pay USD invoices if GBP/USD falls below 1.25.

• Expats/Travelers: Split around 1.26–1.28 on GBP/USD.

JPY

• SMBs: Hedge JPY receivables if USD/JPY above 154.

• Expats/Travelers: Wait for 150–152 on USD/JPY to buy yen.

AUD

• SMBs: Pay USD when AUD/USD reaches 0.65–0.66; split.

• Expats/Travelers: Wait near 0.66 on AUD/USD to convert.

NZD

• SMBs: Pay USD if NZD/USD drops below 0.60.

• Expats/Travelers: Wait toward 0.61 on NZD/USD to buy NZD.

CAD

• SMBs: Pay USD on USD/CAD dips to 1.35–1.36.

• Expats/Travelers: Split around 1.37 on USD/CAD.

SGD

• SMBs: Pay USD on USD/SGD dips to 1.35.

• Expats/Travelers: Wait near 1.34–1.35 on USD/SGD to buy SGD.

Scenario → Action Matrix (1-week)

Next 2 Weeks — Key Data & Events

Sources

Federal Reserve, European Central Bank, Bank of England, Bank of Japan, Reserve Bank of Australia, Reserve Bank of New Zealand, Bank of Canada, Monetary Authority of Singapore, U.S. Bureau of Labor Statistics, Eurostat, Statistics Canada, Australian Bureau of Statistics, Reuters, Bloomberg, Financial Times

Disclaimer: Please note any provider recommendations, currency forecasts or any opinions of our authors should not be taken as a reference to buy or sell any financial product.