EUROPEAN FX UPDATE: DXY firmer into NFP, JPY unreactive to further jawboning

DXY: +0.1%, 100.20

• DXY is a little firmer today and currently trading towards the upper end of a 100.10 to 100.32 range. From a technical standpoint, the index topped its 200 DMA at 99.91 in the prior session and has continued to rise to a multi-month high – levels not seen since late-May’25.


• Factors which has boosted the USD in the past couple of sessions include haven demand (as tech sentiment wanes), but most recently after the FOMC Minutes leaned hawkishly – casting further doubts on a December cut. In brief, it revealed a divided committee on the appropriate pace of easing, with many favouring a 25bp cut, several preferring to hold rates. Most participants judged that further cuts are appropriate, but several did not see a December cut as likely. Elsewhere, the BLS announced that the October 2025 Employment Situation Report has been cancelled, noting the Establishment Survey (NFP) data will be published with November’s release on December 16th. This essentially means that the Fed will go into the December confab with only today’s NFP report, as visibility into the region’s jobs situation remains hampered.


• Forecasts for September are broadly unchanged, with payrolls expected to rise +50k after August’s +22k, though wide estimates range from -20k to +120k. The unemployment rate is seen steady at 4.3% (range: 4.2–4.5%). Average hourly earnings are expected to rise +0.3% M/M (prev. 0.3%) and 3.7% Y/Y (prev. 3.7%), and the workweek is seen unchanged at 34.2hrs.


• As it stands money markets currently price in a near-25% chance of a cut at the December meeting.

EUR: -0.1%, 1.1522

• EUR is a little weaker vs the Dollar, and as has been the case in recent weeks, a real lack of European specific data to help guide the Single-Currency in any direction. As such, much of the price action has been dictated by the Dollar side of the pair, and will ultimately await the NFP report today. Worth highlighting German Producer Prices data which printed more-or-less in-line, and ultimately had limited impact on the pair.


• Earlier there was some commentary via ECB’s Makhlouf who suggested that he is comfortable with where policy is. Interestingly, he suggested that new changes are unlikely to change – as a reminder, there were some ECB sources which suggested that some members may opt for easing in December citing undershooting risks, based on 2028 projections that are due in December.

JPY: U/C, 157.15

• USD/JPY has continued its ascent beyond the 157.00 mark in overnight trade, to top the 157.50 mark and make a fresh session high of 157.77. Worth noting that the pair has been subject to moves on both sides, with USD gaining amidst a hawkish repricing into the December meeting, whilst JPY has had domestic factors to digest.


• As a reminder in the prior session, JPY soared after Finance Minister Katayama suggested that there was “no specific discussion” on FX. Then the Dollar side of the equation picked up, driving USD/JPY to multi-month highs. Overnight, Katayama was back on the wires where she once again attempted some verbal intervention, but to no effect – the pair continued to edge higher.


• As the European morning progressed, the pair has cooled from best levels, to currently trade at 157.20, but still very much at the upper end of Wednesday’s confines.


• Focus for the Yen remains heavily on the latest stimulus package. It was reported via the Nikkei that Japan’s government is reportedly considering compiling a stimulus package of around JPY 17tln, with a supplementary budget likely to be sized around JPY 14tln. An outlay of JPY 17tln that exceeds the JPY 13.9tln figure from 2024.


• Do note that a full JPY analysis piece can be found on the Newsquawk headline feed at 08:25 London time. Next up, traders will eye nationwide inflation data, to bring monetary policy developments back into focus.

GBP: +0.1%, 1.3069

• A quiet session for the GBP this morning, with little fresh newsflow from a Budget perspective. Cable currently resides in a 1.3039 to 1.3076 range. The GBP has been subject to some selling pressure over the course of the past month, with losses totalling roughly 3% - this comes amidst Budget related jitters as Chancellor Reeves chops and changes her thoughts on the best approach. Moreover, the recent political uncertainty within the Labour party has added to the risk premium.


• Scheduled speakers today include Dhingra and Mann. While pertinent their views are well known and they are firmly in the dove and hawk camps respectively; nonetheless, insight on the recent inflation print, particularly from Mann, will be of interest.

Antipodeans: AUD U/C, NZD +0.1%

• Antipodeans trade mixed, with the Kiwi benefiting from the risk-tone whilst the Aussie is flat and essentially conforms to the subdued risk tone in China overnight, hit by their status in the AI race post-NVIDIA; moreover, base metals are generally softer across the board. For China specifically, no major move was seen on reports that China is reportedly mulling new property stimulus.


• AUD/USD trades within a 0.6472 to 0.6491 range whilst NZD/USD trades in a 0.5596 to 0.5614 confine.

20 Nov 2025 - 10:15- ForexEU Research- Source: Newsquawk