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Overall Market Sentiment: Cautious risk-on. A widely expected 25 bp Fed cut at 18:00 UTC and growing discussion about a possible QT pause have nudged long yields lower and capped the dollar into today’s decision.
Currency Outlooks
🔻 USD: Futures price about a 95 to 97 percent chance of a 25 bp cut today, with some probability of another by December. The 2s10s curve is modestly positive near half a percentage point, which usually limits late-cycle dollar strength when growth is steady. Core PCE on Friday is expected near +0.2 percent month on month and about 2.9 percent year on year. If guidance hints at slower balance-sheet runoff, front-end pressure should ease and dips in USD should extend. Counter-risk: a firm pushback on December odds could spark a brief squeeze.
🔺 EUR: The ECB is expected to hold tomorrow, so the near-term driver is the Fed and Friday’s PCE. A softer USD and stable euro inflation expectations keep EURUSD supported on dips. Key levels: support 1.1600 then 1.1550, resistance 1.1700 then 1.1760.
🔻 GBP: Markets keep roughly a one-in-three to two-in-five chance of a BoE cut on November 6 after inflation held at 3.8 percent. Cable trades heavy below its longer-term averages unless the Fed leans more dovish than priced. Levels: support 1.3140, resistance 1.3330 to 1.3400.
⚖️ CAD: Into today’s meeting, markets lean toward a 25 bp BoC cut to 2.25 percent. Oil near 60 WTI blunts CAD’s usual tailwind, so USDCAD dips can be shallow unless the BoC pairs a cut with a firmer growth tone. Levels: support 1.3860 then 1.3800, resistance 1.4015.
⚖️ CHF: Swiss inflation is very low and the policy rate sits near 0.25 percent. CHF stays mostly a function of risk appetite and euro dynamics. EURCHF remains anchored in the 0.92 to 0.93 zone, while USDCHF takes its cue from the broad dollar.
🔻 JPY: Yield differentials still favor the dollar, but intervention sensitivity rises as 153.00 approaches. If the Fed cuts and long yields drift lower, USDJPY should fade toward 151 to 151.5. Bigger trend change still needs clearer BoJ tightening signals.
🔺 AUD: Q3 trimmed-mean CPI rose about 1.0 percent quarter on quarter, cutting near-term odds of an RBA move. With global risk steady and the dollar softer, AUD has topside room while 0.6550 holds. Resistance sits near 0.6660 then 0.6700.
🔻 NZD: The policy path is easier than peers and growth is soft, so rallies are fragile unless global risk accelerates. NZDUSD faces supply near 0.5820 to 0.5880, with 0.5740 as first support. Relative spreads versus AUD also argue for NZD underperformance on crosses.
🪙 Gold: Pullback days are likely shallow while the Fed eases and real yields are capped. The 3,900 to 4,050 area frames the near-term range, with dips favored if PCE is benign.
🛢 Oil: WTI around 60 and Brent mid-60s point to range-bound crude. Without stronger demand signals, energy-beta FX outperformance is limited.
📈 Stocks: A cut with gentle guidance favors quality growth and keeps indices supported. A hawkish tone would rotate leadership toward defensives and trim risk appetite.
🧠 Fed cut and QT talk tilt USD softer
Published: 10/29/2025