Published: 10/28/2025

Overall Market Sentiment: Cautiously risk-on as markets price an almost certain Fed cut on Wednesday, nudging Treasury yields lower and the dollar softer. A central-bank-heavy week keeps positioning tight and intraday swings can look outsized around prints and headlines.

Currency Outlooks

🔻 USD: Futures price a high-90s probability of a 25 bp cut on Oct 29, keeping the dollar on the back foot into the decision. The 2s10s sits near +50 to +55 bp with the 2-year around mid-3.4s to 3.5s and the 10-year near ~4.0 percent, a gentle bull-steepening that usually weighs on the dollar when growth angst is not dominant. DXY hovers near 98.6; note 98.50 support and 99.00 resistance into the announcement. Today’s Conference Board Consumer Confidence is at 15:00 CET; a downside miss reinforces a soft-USD bias into the Fed.

🔺 EUR: The ECB is widely expected to hold on Thursday. Focus shifts to the Eurostat flash HICP on Thursday rather than Friday. September headline was 2.2 percent year on year, and markets lean toward a similar pace, which keeps forward ECB easing modest. EURUSD has nudged through 1.1650 with 1.1700 next; dips should hold 1.1600 while the Fed-led dollar drift persists.

⚖️ GBP: UK data are light and sterling trades the global rates story. Market pricing for a BoE cut in December remains limited. EURGBP eyes 0.8750 to 0.8760 resistance with support near 0.8680.

🔻 CAD: The BoC is seen cutting 25 bp on Wednesday with roughly 70 to 80 percent odds, taking the policy rate to 2.25 percent. Oil is steady, while middle-distillate strength on sanctions risk is a mild CAD tailwind if it persists. Prefer selling USDCAD rallies while below 1.4060 with support near 1.3950, but respect headline risk into the BoC.

⚖️ CHF: SNB remains on hold at 0.00 percent with very low inflation. In a calmer risk tape and firmer EUR, the path of least resistance is a slightly higher EURCHF toward 0.9350 to 0.9400, with 0.9280 as support.

🔻 JPY: Lower US yields and a softer dollar ease pressure on USDJPY into Thursday’s BoJ. Base case is an October hold, but markets still price a meaningful chance of a 25 bp hike by December, keeping topside heavy. Expect a sell-rally tone toward 152.5 with support near 151.5, and stay alert to verbal intervention.

⚖️ AUD: Markets assign mixed odds for a Nov 4 RBA cut after a jump in unemployment, so AUD takes its cue from global risk and China tone. If the Fed cuts and US China mood stays constructive, dips toward 0.6400 should attract buyers, with 0.6540 to 0.6580 near resistance.

🔺 NZD: The RBNZ cut 50 bp to 2.50 percent on Oct 8 and left the door open to more easing, while Q3 CPI was 3.0 percent. Rate spreads are stabilizing, which argues for a buy-the-dip bias while NZDUSD holds 0.5700, with 0.5850 to 0.5900 as the next topside zone.

Conclusion

🪙 Gold: Pullback continues after last week’s spike, with spot slipping below 4,000 as haven demand cools alongside détente hopes. If real yields stay anchored, dips should be bought by strategic players.

🛢 Oil: Crude is steady, but diesel and gasoil outperformance stands out as sanctions on Russian producers threaten distillate flows and keep timespreads firm. That dynamic supports energy-linked FX on the margin even if headline crude trades sideways.

📈 Stocks: A near-certain Fed cut and a softer dollar are constructive for risk, with cyclicals favored into mid-week, though thin data and headline risk can still spark sharp rotations.