EUROPEAN FX UPDATE: DXY contained, GBP choppy on UK tax U-turn, AUD/NZD slumps

USD: DXY U/C; 99.25 [99.109-99.336]

• The DXY is little changed after a subdued overnight session, following yesterday’s weakness when USD-denominated assets came under pressure amid a broader risk-off tone. With the government now reopened, focus shifts to the release of delayed economic data, though no official schedule has been confirmed — one could, however, be announced as early as today.


• On Thursday, White House Economic Adviser Hassett said the jobs data will be released for one month but will exclude the unemployment rate due to the shutdown. Meanwhile, Fed’s Kashkari commented that he has “no strong inclination yet” on a December rate cut, adding that the latest data show “more of the same” since October and that the economy’s resilience justified the pause at the last meeting.


• In early European trade, DXY continues to hold within a narrow 99.109–99.336 range, well within Thursday's 98.991-99.591 range.

EUR: EUR/USD -0.1%; 1.1622 [1.1618-1.1648]

• EUR/USD is trading slightly softer in early European hours after holding onto the prior day’s gains during APAC trade, remaining above the 1.1600 handle amid ongoing dollar pressure.


• Newsflow for the Eurozone is light, with the pair contained within a 1.1618–1.1648 intraday range and well within yesterday’s 1.1579–1.1656 parameters. The 50DMA and 100DMA sit just above at 1.1660 and 1.1662, respectively.


• Analysts at ING suggest "EUR/USD has now entirely erased its undervaluation gap, and we now feel less confident about short-term upside unless US data come in soft. We see some correction risks today, with a return below 1.160 surely possible."

GBP: GBP/USD -0.2%; [1.3109-1.3200]

• GBP/USD is in focus this session following reports that Chancellor Reeves has scrapped plans for income tax hikes, a move seen as increasing fiscal risks ahead of the November 26th budget. Gilts slipped at the open, with the pound underperforming into European trade.


• Price action later reversed modestly after Bloomberg sources suggested that improved UK forecasts had prompted Reeves to drop the planned tax rise (see Fixed Income section for details).


• GBP/USD spiked from 1.3121 to 1.3200 on the Bloomberg headlines before easing back toward 1.3150, with trade contained within a 1.3109–1.3200 intraday range and inside yesterday’s broader 1.3100–1.3215 parameters.

JPY: USD/JPY +0.1%; 154.67 [154.32-154.74]

• USD/JPY is struggling for clear direction after recent choppy trade and amid a lack of fresh domestic catalysts, while Japanese press highlights growing scepticism among market participants over the government’s ability to support the yen through direct intervention.


• The JPY is showing limited reaction to the broader risk-averse tone, with sentiment further dampened by sharp remarks from China’s Defence Ministry, which warned that Japan “will only suffer a crushing defeat” should it “dare to take a risk.” The comments followed Japanese PM Takaichi’s statement that a conflict over Taiwan could constitute a “survival-threatening situation” for Tokyo.


• USD/JPY trades within a 154.32–154.74 intraday range, contained inside yesterday’s 154.13–155.02 parameters.

Antipodeans: AUD/USD -0.1%; 0.6521 [0.6518-0.6549], NZD/USD +0.4% 0.5646 [0.5646-0.5691]

• The Antipodeans are mixed with NZD leading gains despite limited fresh catalysts, after the RBNZ confirmed it will proceed with easing mortgage loan-to-value ratio restrictions as previously announced last month.


• AUD/USD briefly moved above its 100DMA (0.6540) before pulling back, while NZD/USD recovered strongly from yesterday’s losses. The AUD/NZD cross meanwhile slipped from a 1.1558 high to a 1.1487 low.

14 Nov 2025 - 10:25- ForexEU Research- Source: Newsquawk