The euro hovered around $1.16, little changed from the previous week’s levels, as markets entered a crucial week filled with global trade negotiations, central bank meetings, and key economic data releases across Europe. Investors welcomed signs of progress in US–China trade talks, with attention now turning to the upcoming meeting between Presidents Trump and Xi Jinping on Thursday, expected to finalize the framework of a preliminary deal discussed over the weekend. Meanwhile, the European Central Bank (ECB) is widely expected to hold interest rates steady at its Thursday meeting, while the US Federal Reserve is anticipated to cut borrowing costs amid signs of a slowing labor market and weaker-than-expected inflation. Later in the week, the Euro Area will release flash third-quarter GDP figures and October inflation data, providing further insight into the region’s economic outlook.

Euro Holds Firm Ahead of Key Week for Global Markets

The South Korean won strengthened to around 1,430 per dollar on Monday, rebounding from an over six-month low in the previous session, supported by a softer dollar and expectations surrounding major policy and trade developments. The greenback eased as investors positioned ahead of the Federal Reserve’s policy meeting this week, with markets widely expecting a rate cut amid signs of cooling inflation and slower growth in the US. Additionally, sentiment in Korea improved as the country prepares to host the APEC summit in Gyeongju, where President Lee Jae Myung is set to meet US President Donald Trump and Chinese President Xi Jinping. Markets are watching for possible updates on trade and tariff discussions between Seoul and Washington, as well as broader commitments on supply chain and semiconductor cooperation that could support Korea’s export outlook.

South Korean Won Gains Amid Dollar Softness, APEC Summit

The New Zealand dollar rose to around $0.576, hovering near a two-week high, supported by renewed optimism over US-China trade talks that could ease risks to the export-reliant economy. US and Chinese negotiators agreed on key issues over the weekend, while Treasury Secretary Bessent said Trump’s 100% tariff threat is “off the table,” ahead of talks between the two presidents. Still, the antipodean currency remained pressured by expectations of further monetary easing by the Reserve Bank. Headline inflation hit a one-year high in Q3 last week, but the RBNZ’s preferred gauge remained at its lowest since early 2021, signaling subdued price pressures. The data aligns with the central bank’s outlook, with traders fully pricing in a 25bps rate cut in November and slim odds of a larger move. The currency is heading for its fourth straight monthly decline.

Kiwi Dollar Hovers Near Two-Week High

The Japanese yen slipped toward 153 per dollar on Monday, nearing its weakest level since February as expectations of aggressive fiscal expansion under the new government and uncertainty over the Bank of Japan’s policy outlook weighed on the currency. The yen has declined sharply this month following the election of Prime Minister Sanae Takaichi, who is expected to implement expansionary fiscal measures and support loose monetary settings. Reports suggest she may unveil a major stimulus package as soon as next month, potentially exceeding last year’s 13.9 trillion yen program aimed at easing inflationary pressures on households. Meanwhile, the BOJ is widely expected to keep rates steady this week, though policymakers are set to debate the conditions for resuming rate hikes as tariff-related risks ease. Investors also await Takaichi’s meeting with US President Donald Trump this week for additional policy signals.

Yen Weakens Toward 8-Month Low

The Australian dollar rose to around $0.653 on Monday, buoyed by optimism over progress toward a US–China trade agreement. The world’s two largest economies have reportedly reached a preliminary accord on key issues, including export controls, fentanyl regulation, and shipping levies, paving the way for Presidents Donald Trump and Xi Jinping to potentially formalize a deal later this week. This much-anticipated meeting could reduce the risk of a full-scale global trade war, which has threatened industries worldwide. Last week, the US and Australia also finalized a critical minerals partnership, with Presidents Trump and Albanese framing it as a strategic step to curb American reliance on China. Domestically, investors are turning their attention to the upcoming Q3 inflation figures and the September Monthly CPI report, which are expected to provide crucial insights into the Reserve Bank of Australia’s forthcoming policy direction.

Aussie Dollar Gains on US-China Deal

The  offshore yuan strengthened to around 7.11 per dollar on Monday, hitting its highest level in four weeks, as optimism over progress in US-China trade negotiations boosted sentiment. After two days of talks in Malaysia, officials from both sides reached an initial consensus on issues such as export controls, fentanyl trafficking, agricultural trade, and shipping tariffs. The constructive tone lifted hopes that Presidents Donald Trump and Xi Jinping could finalize a deal when they meet in South Korea later this week. Adding to the upside, China’s industrial profits surged 21.6% year-on-year in September, the fastest since November 2023, while January–September profits rose 3.2%, marking the year’s first cumulative gain and signaling a gradual corporate recovery. Elsewhere, global markets closely watched the upcoming Federal Reserve interest rate decision, with traders nearly fully pricing in a 25-basis-point rate cut this week after softer-than-expected US CPI data on Friday.

Offshore Yuan Hits One-Month High

The dollar index fell slightly to around 98.8 on Monday, trimming last week’s gains as investors positioned for a pivotal week featuring a highly anticipated meeting between President Donald Trump and Chinese President Xi Jinping and a closely watched Federal Reserve rate decision. Markets are hopeful for a trade breakthrough at Thursday’s Trump-Xi meeting after productive weekend talks between US and Chinese negotiators, who reportedly reached consensus on key issues including export controls, fentanyl, and shipping levies. Trump is also scheduled to meet Japan’s new Prime Minister Sanae Takaichi on Tuesday. Meanwhile, traders have nearly fully priced in a quarter-point rate cut this week following softer inflation data on Friday, though the ongoing government shutdown remains a concern. The dollar weakened most against the Australian and New Zealand dollars amid risk-on sentiment.

Dollar Eases as Trade Talks, Fed Meeting Eye

The Chinese Yuan touched 7.11 against the USD, the highest since September 2025. Over the past 4 weeks, US Dollar Chinese Yuan lost 0.17%, and in the last 12 months, it decreased 0.4%.

Chinese Yuan Hits 4-week High

The Zambia Kwacha touched 22.04 against the USD, the highest since November 2023. Over the past 4 weeks, Zambia Kwacha lost 7.44%, and in the last 12 months, it decreased 16.79%.

Zambia Kwacha Hits 23-month High

The Canadian dollar weakened past C$1.40 per US dollar, slipping toward six-month lows as markets priced a near-certain 25bp Bank of Canada cut and Washington’s abrupt termination of trade talks raised the prospect of tariffs and weaker exports. That trade setback increases the likelihood that tariff and sectoral frictions will squeeze business investment and export revenues, depressing growth and nudging the BoC toward further easing to offset those effects. Markets now assign a high probability to a 25bp cut at next week’s meeting after a run of soft domestic activity and survey readings, which has pushed down expected Canadian short rates and narrowed the yield cushion versus the United States. At the same time US inflation printed slightly softer-than-expected readings for September, firming expectations for Fed easing.

Canadian Dollar Weakens Toward 6-Month Lows

The Indian rupee hovered near the 87.8 mark, well above the record low of 88.7 that was repeatedly reached since throughout the first half of October due to repeated intervention by the RBI in currency markets. The Indian central bank reportedly continued selling dollars at levels stronger than the 88 threshold as the uncertain trade and growth outlook for India clouded its outlook for foreign exchange. Refineries executives reportedly stated they would stop purchasing cheaper Russian oil in the end of near-term contracts due to recent sanctions on the sector by the US government. Not only does this force India to purchase more expensive oil, but global energy prices rose sharply on the event to magnify the outflows of currency from the G20's fastest growing economy. Still, reports indicated that the US could limit Indian tariffs to 15%-16% should the country significantly limit the purchase of Russian energy, limiting the pressure on the rupee.

Indian Rupee Holds Rebound

The euro held above $1.16 at the end of a week marked by upbeat Eurozone PMI figures and weaker-than-expected US inflation data. The October PMI showed the Eurozone’s private sector expanding at its fastest pace since May 2024, driven by robust services growth and stabilizing manufacturing. Germany hit a 29-month growth high, the rest of the bloc expanded solidly, while France recorded its 14th straight monthly decline. In the US, headline inflation rose to 3.0% in September, the highest since January but below forecasts, while core inflation eased to 3.0% from 3.1%, signaling contained price pressures despite Trump’s trade war. Traders raised bets on two more Fed rate cuts this year, with another possible in January, while the ECB is not expected to begin easing until July 2026.

Euro Holds Above $1.16 After Strong PMI Data and Soft US Inflation

The dollar index fell to 98.8 on Friday after all key inflation indicators for the US came in below expectations, reinforcing bets that the Fed will cut interest rates both next week and again in December. Markets are pricing in nearly a 99% probability of a 25bps reduction next week, with similar odds for another cut in December. The lower-than-expected inflation reading also strengthened the view that tariff-related inflationary pressures remain contained. The CPI report was delayed due to the ongoing government shutdown, for which there is still no resolution in sight. Traders also kept a close eye on trade policy developments, with President Trump set to meet Chinese President Xi Jinping next week, while talks with Canada appear to have concluded. On the currency front, the greenback edged lower against the euro, pound, and Australian dollar, but gained slightly against the Canadian dollar. For the week, the dollar remains up roughly 0.5%.

Dollar Falls After CPI Report

The Russian ruble was at 81.2 per USD, remaining stable since reaching two-year highs in the second quarter as strict capital controls and high interest rates offset the impact of fresh sanctions and a grim outlook on Russian growth. The US sanctioned Lukoil and Rosneft, pressuring the outlook of energy exports to India, which have been among the main consumers of Russian oil since the invasion of Ukraine in 2022. Also, the EU announced it would shun Russian LNG on 2027. Still, the impact on the currency was muted as the Kremlin's mandates export-oriented companies to sell 40% of their foreign exchange revenue. Also, the Bank of Russia said it will keep policy restrictive until the end of next year to curb inflationary pressures, limiting the impact of its unexpected 50bps cut. The prolonged effect of Western sanctions, government spending that prioritizes the war against Ukraine, and high borrowing costs drove the IMF to forecast that Russia's GDP will only grow 0.6% this year.

Capital Controls Maintain Ruble Strength

The Turkish lira hit a new record low of 41.9 per US dollar in October 2025, extending its year-to-date decline to around 18%. The currency’s gradual and managed depreciation has persisted since July 2023. The Central Bank of Turkey has maintained a firm presence in the forex market to keep tight control over the lira’s movement and the government continues to pursue a policy of so-called “real appreciation”. On the monetary policy front, the central bank cut rates by 100bps in October, in line with expectations. This marked the third consecutive rate cut, though the smallest in the current easing cycle, as inflation accelerated for the first time in fifteen months, reaching 33.29% in September. Separately, a Turkish court dismissed a case seeking to remove the main opposition party’s leader and annul its 2023 congress, a decision that eases pressure on President Erdogan’s opponents and offers some relief from the political turmoil that has sharply weighed on Turkish markets this year.

Turkish Lira Holds at 41.9

The euro hovered around $1.16 as investors digested flash Eurozone PMI data and awaited delayed US inflation figures due later Friday. The October PMI showed the private sector growing at its fastest pace since May 2024, driven by robust services activity and stabilizing manufacturing. Germany hit a 29-month growth high, the rest of the euro area expanded rapidly, while France posted its 14th consecutive monthly decline. In the US, inflation is expected to accelerate for a second month, ahead of the Federal Reserve’s meeting next week, where markets almost fully price in a 25bps rate cut. Investors also welcomed news that US President Donald Trump will meet Chinese President Xi Jinping next week, amid trade tensions and a looming deadline for additional 100% US tariffs on Chinese goods.

Euro Holds Near $1.16 as Eurozone PMI Surges Ahead of US Inflation

The South Korean won rose to around 1,435 per dollar on Friday, strengthening slightly after the finance ministry said it was prepared to take measures to stabilize markets. The statement came after Finance Minister Koo Yun-cheol met with Bank of Korea Governor Rhee Chang Yong and financial regulators, following the won’s slide to a six-month low earlier in the week. Meanwhile, investors continued to monitor progress in high-stakes trade talks with the US ahead of next week’s APEC summit in Gyeongju, where Presidents Lee Jae Myung and Donald Trump are expected to discuss the USD 350 billion investment pledge. The greenback, however, remained broadly supported amid expectations of a Federal Reserve rate cut next week and lingering uncertainty surrounding the US government shutdown.

South Korean Won Firms as Authorities Signal Support

The offshore yuan held steady around 7.12 per dollar, set for a relatively calm week as markets looked ahead to a much-anticipated meeting between Presidents Donald Trump and Xi Jinping. Trump is aiming to advance a broader agenda in the talks, potentially reviving discussions on a long-sought nuclear arms agreement and pressing Xi to use his influence over Russian President Vladimir Putin to help end the war in Ukraine. At the same time, he has signaled plans to extend the pause on significant tariffs against Chinese goods in exchange for renewed American soybean purchases, tougher enforcement on fentanyl exports, and eased restrictions on rare-earth materials. Meanwhile, China’s Fourth Plenum wrapped up on Thursday with the Communist Party pledging to accelerate its push for technological self-sufficiency, a goal that has taken on greater urgency amid tightening US curbs on access to advanced semiconductors and other critical high-tech components.

Offshore Yuan Set for Steady Week

The Australian dollar remained steady around $0.650, trading in a tight range near two-month lows as investors braced for the upcoming key quarterly inflation figures next week that could shape the Reserve Bank of Australia's policy outlook. Markets forecast the headline CPI to rise to 3.0% annually, at the upper end of the RBA’s 2–3% target, while the core CPI is expected to remain steady. Last week, a surprise uptick in September’s jobless rate pushed markets to price around 70% chance of a 25bps rate cut, up from 40% before. Attention now turns to a speech from RBA Governor Michele Bullock later today for clues on the central bank’s policy direction. Investors also weighed flash PMI figures showing Australia’s factory activity contracted for the first time this year while services growth accelerated in October. The Aussie is still on track for a modest weekly gain, partly due to signs of improving global trade ties, including a recent US-Australia critical minerals pact.

Aussie Dollar Sideways Ahead of Key CPI Data

The Japanese yen weakened toward 153 per dollar on Friday and was on track to lose about 1.5% for the week, even as core inflation in Japan accelerated in September for the first time since May. Both headline and core inflation rose to 2.9% from 2.7% in August, driven mainly by higher electricity prices. Meanwhile, rice inflation, which had surged earlier this year, eased sharply to 49.2% from 69.7%. The data comes ahead of the Bank of Japan’s policy meeting next week, where the central bank is expected to keep rates unchanged. Markets have postponed expectations for the next rate hike to December at the earliest, with most anticipating it early next year. Separately, speculation is mounting that new Prime Minister Sanae Takaichi will unveil a major stimulus package as soon as next month, with reports suggesting it could surpass last year’s 13.9 trillion yen program aimed at easing inflationary pressures on households.

Yen Extends Slide Despite Faster Inflation

The dollar index stabilized just below 99 on Friday and was set to end the week higher as investors braced for a crucial inflation report that could shape the outlook for the economy and interest rates. The report, delayed by the ongoing government shutdown, is expected to show persistent inflationary pressures but is unlikely to prevent the Federal Reserve from cutting rates next week. However, a stronger-than-expected reading could influence the Fed’s December decision by tempering expectations for further easing. Traders also monitored trade developments after the White House confirmed the Trump-Xi meeting in South Korea next week, with US and Chinese representatives set to hold preparatory talks in Malaysia over the weekend. The dollar was poised for its largest weekly gain against the yen amid rising expectations of fiscal stimulus in Japan, while both the euro and the pound also weakened against the greenback.

Dollar Holds Steady Ahead of Key CPI Report

The Mexican peso strengthened to 18.40 per US dollar, hovering near one-year highs as the currency continues to benefit from carry-trade appeal despite signs of easing price pressures and slowing growth. Consumer prices rose 3.63% year-on-year in the first half of October, marginally below the 3.71% consensus, while Mexico’s economic activity index fell 0.9% year-on-year in August after a 1.1% decline in July and was slightly less weak than expected. The absence of major surprises has left markets to price a more gradual easing path rather than abrupt liquidity shocks. Mexico still offers materially higher real yields than many peers even after recent rate cuts, which sustains carry flows and attracts foreign portfolio investment. Meanwhile, prospects of a US government funding resolution and hopes for a US–China trade war resolution have reduced the immediate external risk premium by lowering the odds of a sudden stop in external demand.

Mexican Peso Remains Near 1-Year High

The Turkish lira hit a new record low of 41.9 per US dollar in October 2025, extending its year-to-date decline to around 18%. The currency’s gradual and managed depreciation has persisted since July 2023, when President Erdogan appointed a more orthodox economic team. The Central Bank of Turkey has maintained a firm presence in the foreign exchange market to keep tight control over the lira’s movement and the government continues to pursue a policy of so-called “real appreciation”. On the monetary policy front, the central bank cut rates by 100bps in October, in line with expectations. This marked the third consecutive rate cut, though the smallest in the current easing cycle, as inflation accelerated for the first time in fifteen months, reaching 33.29% in September. Separately, a Turkish court ruling on the leadership dispute within the main opposition CHP, scheduled for October 24, poses a potential source of renewed volatility in the country’s markets.

Turkish Lira Holds at Record Lows

The Russian ruble was at 81.3 per USD, remaining stable since reaching two-year highs in the second quarter as strict capital controls and high interest rates offset the impact of fresh sanctions and a grim outlook on Russian growth. The US sanctioned Lukoil and Rosneft, pressuring the outlook of energy exports to India, which have been among the main consumers of Russian oil since the invasion of Ukraine in 2022. Also, the EU announced it would shun Russian LNG on 2027. Still, the impact on the currency was muted as the Kremlin's mandates export-oriented companies to sell 40% of their foreign exchange revenue. Additionally, the Bank of Russia delivered a softer-than-expected cut and signaled that policy would be set to curb inflationary pressures despite mounting growth concerns. The prolonged effect of Western sanctions, government spending that prioritizes the war against Ukraine, and high borrowing costs drove the IMF to forecast that Russia's GDP will only grow 0.6% this year.

Russian Ruble Holds Despite Sanctions

The Swiss franc traded around 0.80 per USD, remaining close to the highest since 2011, after the SNB released its meeting minutes, the first-ever detailed account of the central bank’s rate-setting discussions. A summary of the September 25 meeting showed that policymakers viewed the current policy settings as supportive of the economy amid weak price growth and tariff-related uncertainties. The SNB kept its benchmark interest rate unchanged at 0% and ruled out additional easing, according to the minutes, as inflationary pressures in the economy are not expected to be persistently negative.

Swiss Franc Holds Firm

The Indonesian rupiah weakened toward 16,650 per dollar on Thursday, extending losses for a second session after Bank Indonesia signaled more room for rate cuts amid expectations of low inflation through 2026. The central bank Wednesday unexpectedly held steady its benchmark rate at 4.75%, following three straight reductions, with Governor Perry Warjiyo saying efforts are underway to strengthen monetary policy transmission. Since September 2024, BI has cut rates six times, totaling 150 basis points. Meanwhile, the rupiah has fallen about 3% against the dollar this year, among the weakest in emerging Asia. At the same time, President Prabowo Subianto aims to lift economic growth to 8% during his term, compared with around 5% in the post-pandemic years, and targets 5.4% growth in 2026. Elsewhere, the dollar index inched higher ahead of the September inflation report due later today, as investors assessed the impact of the ongoing U.S. government shutdown.

Rupiah Extends Losses on Talk of Further Rate Easing

The Indian rupee traded around 87.7 per USD, holding near a one-month high as markets returned from a two-day break to signs of improving US–India trade ties. Reports suggest the two countries are close to a deal that would cut US tariffs on Indian imports to around 15%–16%, down from about 50%, with energy and agriculture central to the talks. As part of the possible agreement, which could be announced at the upcoming ASEAN summit, India may gradually reduce its Russian oil purchases while opening the door to more US corn and soymeal. The upside in the rupee was also aided by intervention from state-run banks via dollar sales, likely on behalf of the Reserve Bank of India. Last week, the central bank intervened aggressively in the foreign exchange market, conducting at least two operations to lift the rupee from record lows.

Indian Rupee Holds Near 1-Month High

The South Korean won weakened to around 1,435 per dollar, nearing its lowest level since May, as investors reacted to the Bank of Korea’s decision to keep its policy rate unchanged at 2.5%. Policymakers maintained a cautious stance amid persistent concerns over the won’s weakness, high household debt, and rising housing prices, noting that the rate differential with the US Federal Reserve remains wide. Separately, investors remained watchful of the ongoing negotiations on a revised Korea-US investment plan, scaled down from an initial USD 350 billion to about USD 200 billion over eight years, with potential implications for capital flows. At the same time, the dollar held firm globally ahead of the upcoming US inflation data and next week’s Trump-Xi meeting in South Korea, as traders assessed the outlook for Fed policy and trade relations.

South Korean Won Falls After BOK Rate Hold

The Japanese yen weakened past 152 per dollar on Thursday, nearing eight-month lows amid growing speculation that new Prime Minister Sanae Takaichi will unveil a large-scale stimulus package as early as next month. Reports indicated the plan could exceed last year’s 13.9 trillion yen initiative aimed at easing inflation pressures on households. Takaichi, confirmed as prime minister on Tuesday, is expected to pursue expansionary fiscal policies and support accommodative monetary policy. Meanwhile, the Bank of Japan is widely anticipated to keep rates unchanged next week, with markets now projecting the next hike in January. Traders also monitored trade headlines after reports that the US may restrict exports to China involving US software. President Donald Trump later said his meeting with Chinese President Xi Jinping is “scheduled,” easing some concerns over US-China relations.

Yen Weakens on Large Stimulus Bets

The South Korean Won touched 1436.00 against the USD, the lowest since May 2025. Over the past 4 weeks, US Dollar South Korean Won gained 2.16%, and in the last 12 months, it increased 4.08%.

South Korean Won Hits 24-week Low

The dollar index rose slightly above 99 on Thursday, recouping losses from the previous session as investors looked ahead to the September inflation report due Friday that could offer insights on the economy amid a data blackout. The three-week old US government shutdown has delayed the release of crucial data that could guide the economic and interest rate outlook. President Donald Trump rejected a request from top Democratic lawmakers to meet until the shutdown ends. Meanwhile, the Federal Reserve is widely expected to lower rates by 25 basis points next week and again in December. On the trade front, Trump stated that his upcoming meeting with Chinese President Xi Jinping is “scheduled,” easing some fears about US-China relations. The greenback also drew support from weakness in the pound and yen following soft UK inflation figures and growing expectations of fiscal stimulus in Japan.

Dollar Edges Higher as Inflation Data Eyed

The Canadian dollar strengthened past C$1.40 per US dollar, moving away from six-month lows as investors trimmed expectations for more aggressive Bank of Canada easing and as Canada’s main export recovered from near multi-year lows. The annual inflation rate rose to 2.4% in September 2025 from 1.9% in August, overshooting the 2.3% forecast and marking the highest reading since February. It was the first time in six months that inflation exceeded the Bank of Canada’s 2% threshold. The mean core inflation rate, closely watched by the Bank of Canada, rose to a one-year high of 3.1%, above the 3.0% consensus, which has reduced the magnitude and immediacy of expected Bank of Canada easing. Higher oil prices near the high-$50s per barrel have also helped by improving Canada’s terms of trade and near-term export receipts.

Canadian Dollar Rebounds from 6-Month Lows

The Mexican peso strengthened past 18.40 per US dollar, hovering near over one-year highs as the Mexican currency continues to benefit from carry-trade appeal despite growing evidence of a slowing economy. Mexico’s economic activity index fell 0.9% year-on-year in August, after a 1.1% decline in July but less than market expectations of a 1% drop. However, the lack of surprises in recent data left markets to price a more gradual easing path rather than abrupt shocks to liquidity. Mexico still offers a materially higher real yield than many peers even after recent rate cuts, which keeps the carry trade alive and attracts foreign portfolio flows. At the same time prospects of a US government funding resolution and calmer US China trade rhetoric have eased the risk of a sudden stop in external demand, narrowing the external risk premium.

Mexican Peso Holds Strong

The euro edged slightly below $1.16 as investors awaited delayed US inflation data and preliminary PMI readings from major European economies due on Friday for further clues about the global monetary policy outlook. The US dollar found modest support from renewed optimism over US–China trade relations, after President Donald Trump expressed confidence that his upcoming meeting with President Xi Jinping would produce a “good deal” on trade. On the monetary  policy front, softer-than-expected UK inflation data strengthened expectations that the Bank of England could begin cutting interest rates in the coming months, while markets view a 25-basis-point rate cut by the Federal Reserve in October as almost certain. The European Central Bank, by contrast, is not expected to begin easing until July 2026.

Euro Softens Ahead of Key Data

The dollar index climbed above 99 on Wednesday, its strongest level in about a week, extending gains for a fourth consecutive session. The greenback benefited from a weaker pound after UK inflation came in below expectations, boosting bets on interest rate cuts by the Bank of England. Meanwhile, concerns over the ongoing government shutdown persist, with no resolution in sight. On Tuesday, President Trump rejected a request from top Democratic lawmakers to meet until the shutdown ends. The US CPI report is still expected on Friday. On the monetary front, the Federal Reserve is widely anticipated to cut the federal funds rate by another 25 basis points next week, despite the lack of updated economic data. The greenback also strengthened against the euro but was little changed against the yen, the Swiss franc and the Canadian dollar.

Dollar Index Edges Higher

The South African rand traded around 17.5 per USD, a near two-week low, pressured by declining prices of precious metals, particularly gold. On the domestic data front, South Africa's inflation edged higher to 3.4% in September from 3.3% in August, though below analysts' estimates of 3.5%. This might lead the central bank to keep its policy rate at 7% at its next meeting on November 20 in an effort to guide inflation toward 3%. In July, the MPC indicated a preference for inflation to settle near the lower end of its 3%–6% target range rather than the 4.5% midpoint, even though the target has not yet been formally changed.

South African Rand at Near 2-Week Low

Sterling extended losses toward $1.33, its weakest level in a week, after inflation data came in below market expectations, fueling speculation of early interest rate cuts by the Bank of England. Headline inflation held steady at 3.8% in September, defying forecasts of a rise to 4%, as food price growth continued to ease. Meanwhile, the core inflation rate edged down to 3.5% from 3.6%, also undershooting expectations of 3.7%. The softer readings offered some relief for Chancellor Rachel Reeves, who recently signaled plans to unveil “a range of policies” in her November 26 budget aimed at “bearing down on some of the costs that people face.” Government borrowing, however, totaled £99.8 billion in the first half of the fiscal year—£7.2 billion above the OBR’s forecast. Looking ahead, markets now anticipate that the Bank of England could start cutting interest rates early next year, as inflation is expected to continue moderating and labor market data point to further signs of cooling.

Pound Weakens as Soft UK Inflation Data Boost Rate Cut Bets

The Indonesian rupiah weakened past 16,600 per dollar on Wednesday, retreating after several sessions of relative stability. The decline came amid expectations that Bank Indonesia will cut its benchmark interest rate for the fourth consecutive meeting later in the day, likely bringing it down to a three-year low of 4.5% as policymakers prioritize supporting economic growth. Adding pressure, the country’s foreign exchange reserves fell to a 14-month low in September, underscoring continued intervention efforts to stabilize the currency following political unrest and mass protests. Meanwhile, consumer sentiment in the month dropped to its weakest level since April 2022, reflecting growing concerns over eroding purchasing power and softer domestic demand. Globally, the U.S. dollar index hovered near 98.9, staying firm as investors awaited key U.S. inflation data ahead of a widely expected Federal Reserve rate cut next week.

Rupiah Falls Ahead of Bank Indonesia Policy Rate Decision

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.

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