EUROPEAN FX UPDATE: DXY flat with FX price action fairly subdued, JPY little moved on GDP contraction

DXY: U/C, 99.39

• DXY is flat and trades in a busy 99.29 to 99.47 range, given the lack of pertinent newsflow this morning but ahead of a packed weekly docket, which includes; the release of the delayed September NFP report, FOMC Minutes and a number of Fed speakers. Today’s docket is a bit more on the quiet side with only really the NY Fed Manufacturing report and comments via Fed’s Williams, Jefferson, Kashkari and Waller.


• To briefly preview the FOMC Minutes, this will be the readout of the hawkish cut in October – whereby Chair Powell clouded the view of a December rate reduction. As it stands, money markets price in a 40% chance of a 25bps reduction at next month’s meeting. The FOMC Minutes will, of course, be closely watched, but price action may be limited given the September NFP report will be out a day later – consensus looks for a gain of 50k, and for unemployment to remain steady at 4.3%. As a reminder, private labour market indicators have been dire in recent weeks and have put pressure on the USD.


• Data aside, focus has also been on trade developments in the US; Treasury Secretary Bessent said the China rare-earths deal will “hopefully” be done by Thanksgiving, according to Fox News. More broadly, US President Trump said he does not think more tariff rollbacks will be necessary.


• And honing in on US-Swiss developments, the White House agreed a framework between the two countries; several major Swiss companies are set to invest “billions” in the US, and Switzerland will benefit from a reduction of its tariff rate to 15% (prev. 39%). The CHF has strengthened in the past week or so amidst the initial source reports, with EUR/CHF then finding a base on the confirmation itself. In detail, EUR/CHF made a fresh YTD low at 0.9179 on Friday, before bouncing back to trade around the 0.92180 mark today.

EUR: -0.2%, 1.1600

• EUR is a little lower today and trades just around the 1.1600 mark, within a 1.1596 to 1.1624 range. Newsflow for the region is relatively quiet ahead of the European Commission Autumn forecasts; there were some comments via ECB’s de Guindos who suggested that he is slightly more optimistic regarding growth, and expects inflation to converge towards target.


• Back to the Commission it raised its 2025 growth forecast for the bloc but cuts its view for 2026 to 1.2% (prev. 1.4%), while the inflation forecast was maintained for the year but increased in 2026. No significant EUR move seen, as such the single currency remains around the 1.16 mark.

USD/JPY: +0.1%, 154.72

• JPY is modestly lower vs the USD, and as is the case with peers, trade has been contained within a narrow 154.41 to 154.82 range. Overnight, price action was also lacklustre, and was ultimately little moved by a less-than-feared contraction in headline GDP – largely due to weak exports and lower tourism. Analysts at OxEco write that the dip in GDP will likely prove to be temporary, suggesting that consumption should modestly improve.


• On the fiscal side of things, Japan's Key Government Panel member Kataoka said that the Government must compile a stimulus package of up to JPY 23tln, funded with JPY 10tln in net bond issuance and JPY 13tln with tax and non-tax revenues. This would be much larger than the Nikkei report earlier, which suggested a package of JPY 17tln. The fiscal comments were also accompanied by monetary policy remarks, where Kataoka suggested that the BoJ should wait till March/April 2026 to raise rates. Overall, USD/JPY incrementally moved higher on these remarks, but ultimately pared the move.

GBP: U/C, 1.3162

• GBP is essentially flat and trades towards the midpoint of a 1.3136 to 1.3180 range. Traders remain solely focused on the Budget developments, albeit updates over the weekend have been lacking on that front. This morning, The Times reported that Reeves is considering a nightly levy for British holidaymakers and foreign tourists on hotel stays and Airbnb-style rentals.


• This week, attention will also be on a key UK inflation report on Wednesday; as a reminder, Governor Bailey, who is set to be the deciding vote for the December meeting, put added focus on inflation. Headline Y/Y is forecast by the BoE to slip to 3.6% (prev. 3.8%), driven primarily by base effects from the 2024 Ofgem adjustment.

Antipodeans: AUD -0.2%, NZD -0.1%

• Antipodeans are pressured, with the Aussie the marginal laggard across G10 pairs. Nothing really driving things for the currencies this morning, but follows on from subdued price action overnight, following the APAC risk tone.


• AUD/USD trades at the lower end of a 0.6512 to 0.6537 range; NZD/USD trades within a 0.5659 to 0.5688 range.

17 Nov 2025 - 10:05- ForexEU Research- Source: Newsquawk