Published: 10/22/2025

Overall Market Sentiment: Mixed with a mild risk-on bias. A cooler UK inflation print and a near-certain Fed cut next week keep front-end yields contained, while Friday’s delayed US CPI and global PMIs cap conviction.

Currency Outlooks

🔺 USD: Futures imply a very high probability of a 25 bp Fed cut on Oct 29. The 2-year sits near 3.45% and the 10-year near 3.96%, leaving 2s10s around +50 bp, a backdrop that usually limits fresh USD traction unless inflation surprises hot. If Friday’s CPI lands close to consensus, dollar upside should fade into month end. Levels: DXY support 98.60, resistance 99.40.

🔻 EUR: Markets overwhelmingly expect the ECB to hold on Oct 30, so EUR trades the US rates path and Friday’s PMIs. Watch 1.1600 as first support and 1.1700 as resistance. If the Fed cuts and US CPI is benign, a relief pop toward 1.17 to 1.18 is plausible. (Flash PMIs start Friday morning Europe time.)

🔻 GBP: UK CPI held at 3.8% YoY, core cooled to 3.5% and services to 4.7%, which lifted BoE cut pricing into year end. Sterling trades mostly off the dollar and risk. Update the range to reflect spot: support 1.3300, resistance 1.3400 to 1.3450.

⚖️ CAD: Oil’s small rebound helps, but the macro tone still dominates. USDCAD has been trading near 1.40, so treat 1.3950 as first support on dips and 1.4050 to 1.4100 as topside supply unless WTI reclaims the low 60s.

⚖️ CHF: The SNB policy rate is 0.00% and officials are comfortable letting FX absorb shocks if moves are orderly. EURCHF pivots around 0.93, while USDCHF around 0.79 to 0.80 tracks the dollar leg. Range preference into Friday: EURCHF 0.9280 to 0.9400.

🔻 JPY: USDJPY holds in the high 151s. Markets assign a low probability of an October BoJ hike, so the pair remains sensitive to US front-end yields and perceived intervention risk near 152 to 155. Levels: support 151.00, resistance 152.50.

⚖️ AUD: RBA is on hold and AUD trades the global risk and US rates impulse. With spot near 0.65, prefer 0.6450 support and 0.6600 resistance into Friday’s PMIs.

⚖️ NZD: RBNZ cut the OCR to 2.50% this month and Q3 CPI printed 3.0% YoY, which keeps NZD reactive to risk and relative rate spreads. Prefer a 0.5920 to 0.6040 range into Friday’s PMIs and US CPI.

Conclusion

🪙 Gold: After a parabolic run, gold fell by roughly 6% intraday on Tuesday, which eased overbought conditions before CPI. Real-yield direction after the Fed will steer the next leg.

🛢 Oil: Crude is modestly firmer today, but balances remain soft. WTI near 58 and Brent around 62 leave energy beta FX sensitive to inventory and timespread signals.

📈 Stocks: Earnings are mixed and direction is data-led. A soft CPI plus a Fed cut would support quality growth and cap the USD. A hot CPI would extend the USD bid and pressure duration.

Week-ahead playbook

• Fri Oct 24: US CPI at 08:30 ET and global flash PMIs. This is the week’s volatility cluster for USD and front-end rates.

• Thu Oct 30: ECB expected to hold. Reaction is mostly about US yields and PMIs.