🧠 Fed cut bets lift risk sentiment, oil slips

Published: 11/24/2025

Overall Market Sentiment:
Cautious risk-on. Equities are firmer and the dollar is a bit softer against most majors as futures price around a 60 percent chance of another 25 bp Fed cut in December. Data gaps from the recent U.S. shutdown and several big events later this week keep volatility elevated rather than complacent.

Geopolitics (energy):
Markets are watching Ukraine peace negotiations because a credible deal could eventually ease sanctions on Russian energy exports and add to global supply. Brent is trading near 62, with investors weighing a possible peace dividend against uncertainty over the timing and scope of any sanctions rollback. European defence shares have lagged broader indices on these headlines. For FX, this mix tends to trim classic safe-haven demand for CHF and USD at the margin while capping CAD and NOK when oil is heavy. Many are watching the 60 to 65 Brent range as a crude sentiment barometer.

Currency outlooks

⚖️ USD:
The dollar index is holding just above 100 and above the 200-day moving average near 99.8, which keeps the broad tone constructive even as it softens modestly versus Europe and high-beta FX. Futures imply roughly a 60 percent probability of a December cut, while the 2-year and 10-year yields around 3.5 and 4.1 percent leave the curve only mildly positive. The U.S. data blackout puts extra focus on this week’s GDP revision and core PCE. Near term, if PCE confirms inflation gliding toward 2 percent, easing expectations could nudge the dollar lower against peers closer to the end of their cutting cycles. Conversely, an upside PCE surprise or evidence of re-accelerating growth would support the dollar toward the upper end of the roughly 100 to 105 index range that traders are monitoring.

⚖️ EUR:
The euro has edged up toward 1.15, helped by slightly softer U.S. rate expectations and euro-area inflation stabilising near 2 percent. Headline inflation is estimated around 2.1 percent for October, with underlying measures a bit higher, which broadly validates a steady ECB stance. Futures curves imply the ECB on hold well into 2026 with only shallow easing, so relative rate differentials versus the U.S. are no longer clearly moving against the euro. The main drag remains growth, especially in Germany, which tempers enthusiasm for a sustained up-trend. For the week ahead, EURUSD around 1.15 is a pivot, with Eurozone sentiment readings and Friday’s CPI prints in focus.

🔻 GBP:
UK inflation has fallen toward the mid-3s and the Bank of England held at 4 percent in November by a narrow vote, leaving a December cut widely priced. Wednesday’s budget is expected to include meaningful tax increases to plug the fiscal gap, which could weigh on growth expectations and gilts. Sterling is holding near 1.31 against the dollar and around 0.88 versus the euro, levels many view as mid-range. Near-term risks look tilted lower if the budget is seen as growth-negative and U.S. data do not soften enough to push the dollar down.

🔻 CAD:
The Bank of Canada has already cut to 2.25 percent as growth cooled and inflation drifted back toward target. Canadian GDP has been soft, and terms of trade are less supportive with Brent around 62 and WTI in the high-50s. USDCAD trades near 1.41, with the 1.39 to 1.42 band still the reference range, and Friday’s Canadian GDP print as the key local catalyst this week. Absent an oil rebound or a clear U.S. undershoot, risks lean toward CAD underperformance versus USD and the stronger European majors.

⚖️ CHF:
Swiss inflation slowed to roughly 0.1 percent year on year, near the bottom of the SNB’s definition of price stability, and policy sits around zero. That caps domestic impetus and leaves CHF driven by external risk and rate differentials. EURCHF is close to 0.93 and USDCHF around the low-0.80s, consistent with a firm, but not extreme, franc. Risk-on equity days and hopes for a peace framework lean against aggressive safe-haven flows, but any setback in talks or renewed equity stress would quickly put CHF back in demand. Overall balance is neutral.

🔺 JPY:
The yen begins the week near multi-month lows, with USDJPY around the mid-150s and official rhetoric signalling growing discomfort with further weakness. Intervention risk is elevated, with many watching the high-150s as a potential pain zone. At the same time, the Bank of Japan has hinted further hikes are on the table after this year’s exit from negative rates, especially if yen weakness lifts inflation and raises fiscal questions. Global yields remain high in level terms, but the gap is no longer widening, which limits fresh pressure against JPY. Near-term risk skew leans toward bouts of yen strength if intervention chatter intensifies or U.S. data disappoints.

🔻 AUD:
The RBA held at 3.6 percent in November, noting incomplete progress on inflation and some renewed price pressure. Markets see roughly an even chance of another cut by early 2026, leaving AUD trading as a high-beta, China-sensitive currency. AUDUSD sits around 0.64 to 0.65, with Wednesday’s Australian CPI the key event; softer numbers would validate easing expectations, while a firm print could give a temporary lift if U.S. PCE is benign. With oil soft and global tech valuations under scrutiny, risks lean slightly toward AUD underperformance against more defensive majors.

🔻 NZD:
The RBNZ cut the OCR to 2.5 percent in October and has signalled openness to further reductions as growth slows and inflation is expected to drift back toward the 2 percent mid-point after peaking near 3 percent in Q3. Another 25 bp cut is widely expected this week, likely framed as final or near-final for this cycle. NZD is hovering near 0.56 against USD and has struggled to hold rebounds ahead of the decision. Near-term risk bias remains tilted lower if the RBNZ both cuts and keeps the door open to more easing, though a more cautious tone could spark short-covering toward 0.57 to 0.58.

Conclusion

🪙 Gold:
Trading around 4,070 to 4,080 as cut expectations and lower real yields support demand, behaving more like a long-duration hedge against policy uncertainty than a pure panic barometer.

🛢 Oil:
Brent is near 62 after a month-long slide, pressured by peace-talk optimism and growth concerns. Markets are treating 60 as an important psychological floor, with any clear breakdown likely to reinforce disinflation narratives and weigh on energy-linked FX.

📈 Stocks:
The S&P 500 ended last week on firmer footing, but a higher-than-usual volatility backdrop points to choppy trading around AI valuations and a data-heavy calendar. Leadership still skews to large-cap tech and quality growth, though positioning there is no longer one-way.

₿ Crypto:
Bitcoin is oscillating in the mid-80k range after a sharp pullback, with structure described as fragile rather than outright bearish. Near-term behaviour looks tied to global liquidity expectations and equity risk appetite more than to idiosyncratic crypto news.



This is general, educational market commentary, not investment advice or a trading signal. It is meant to help readers understand how current macro data, policy expectations and sentiment are interacting across FX and major asset classes.