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Overall Market Sentiment: Cautious risk-on. Equities stabilize after a tech wobble as traders lean toward a December Fed cut but respect Powell’s hawkish tone. A gently steeper curve and a softer dollar index inside a broad range keep FX two-way with event risk clustered next week.
⚖️ USD: Fed sensitivity remains the top driver. Fed funds futures price a roughly 65 to 75 percent chance of a December cut, yet Powell’s tone and firm long-end yields limit how far the dollar can fall on soft data headlines. The 2s10s spread has re-steepened toward about 50 basis points as 10s hover near 4.1 while 2s trade in the mid-3.6s, a setup that usually tempers USD downside versus high-beta FX. The Dollar Index is stuck beneath 100, with intraday support near 99.2 and resistance around 100.0. Nuance: the ongoing U.S. data blackout raises volatility around proxies like ISM on Monday rather than the usual PCE and payrolls prints.
⚖️ EUR: The ECB held the deposit rate at 2.0 and signalled it is in a good place, which anchors differentials but leaves EUR reliant on incoming inflation prints. Flash HICP for October is expected near 2.1 to 2.2 percent year on year after a few upside country surprises, which should limit downside in EURUSD unless U.S. yields break higher. Spot hovers in the mid-1.15s with support at 1.1550 and resistance at 1.1640 to 1.1650. A firm ISM would cap rallies, while a soft read would allow a push toward the upper end of the range.
🔻 GBP: Markets price roughly 30 to 40 percent odds of a BoE cut at the November MPC, with a higher combined chance for one by December. That keeps rallies shallow, especially with UK 2-year gilts anchored just under 3.8 percent. Cable is defending 1.3140 to 1.3150 as first support; failure there risks 1.3000. If the BoE leans to a hawkish hold, a squeeze toward 1.3270 cannot be ruled out.
⚖️ CAD: The BoC cut 25 bp to 2.25 and hinted policy is near neutral, which reduces ease-every-meeting momentum. Oil stabilizing into OPEC+ limits CAD underperformance, but USDCAD remains sticky near 1.40 with resistance at 1.4030 and support at 1.3920. A sustained Brent move above 68 would be the cleaner CAD tailwind; sub-62 argues the opposite.
⚖️ CHF: The SNB policy rate is 0.00 percent and sight-deposit guidance implies comfort with a firm franc while inflation stays soft. EURCHF sits around 0.927 to 0.928 with the 0.925 area a key pivot, while USDCHF tracks the global dollar tone near 0.80. A safe-haven bid would return on equity drawdowns or an upside shock in USDJPY.
⚖️ JPY: Verbal intervention tone has sharpened and markets are watching the 155 zone as a potential line in the sand. December BoJ hike risk is increasingly in play after firm Tokyo CPI and better production, yet only about half is priced, leaving USDJPY sensitive to both yields and policy headlines. Supports sit at 153.5 and 152.7 with 155.0 as resistance.
⚖️ AUD: The RBA is widely expected to hold in November after a Q3 inflation overshoot, while policymakers prefer to look through near-term noise. AUDUSD is anchored around 0.655 with 0.6500 support and 0.6620 resistance. A firmer China impulse or a softer U.S. ISM would help, but AUD likely needs yields or copper to extend to break 0.67.
🔻 NZD: The RBNZ delivered a 50 bp cut to 2.50 this month and markets keep a decent chance of another trim in late November. NZDUSD near 0.573 struggles as EURNZD holds around 2.02, with rate-spread dynamics versus AUD and USD still unfavorable near term. Upside requires clearer signals the Bank is nearing the end of its cutting cycle. Key NZDUSD levels: support 0.5680, resistance 0.5880.
• Monday Nov 3: ISM manufacturing takes center stage given delayed government data. A sub-50 headline would knock U.S. real yields and favor EUR, JPY, and gold at the margin. A re-acceleration would revive USD bids.
🧠 Dollar buoyed by “higher-for-longer” vibes while OPEC+ eyes supply hike
Published: 10/31/2025