EUROPEAN FX UPDATE: DXY slips in early European hours to the benefit of G10s; GBP saw fleeting losses on soft GDP, AUD outperforms on strong Aussie jobs data

USD: DXY -0.2%; 99.31

• The DXY edged lower in early European trade after holding steady overnight amid a lack of fresh catalysts, despite the passage of the US funding bill to reopen the government — subsequently signed by President Trump — officially ending the shutdown. However, concerns linger that the deal merely delays the issue, with another potential funding impasse looming at the end of January.


• On the data front, uncertainty persists over upcoming releases: White House Press Secretary Leavitt said October’s CPI and jobs reports are unlikely to be published, while there has been no official confirmation from the BLS regarding timing. The White House later stated that September’s BLS data will be released following the reopening but offered no specific date.


• White House Economic Adviser Hassett meanwhile warned that the shutdown will weigh on Q4 GDP, projecting growth at 1.5–2.0%, with full-year output around 2%. He added that supply-side policies should continue to support growth without fuelling inflation.


• ING analysts point out that open interest in bullish Treasury options has risen sharply in recent days, implying markets are leaning toward softer US data and a dovish Fed repricing. Writing that with only 15bps of cuts priced for December, there’s ample room for front-end rate repricing to spill over into the dollar.


• DXY trades at fresh weekly lows near the lower bound of a 99.16–99.59 range, with the next supports seen at 99.00 and the October 30th low of 98.91.

EUR: EUR/USD +0.2%; 1.1611

• EUR/USD tracked the dollar’s decline after an indecisive overnight session, initially stalling just below the 1.1600 handle before breaking higher amid broad-based USD weakness rather than any fresh Eurozone-specific catalyst.


• ING maintains a constructive year-end outlook for the pair but cautions that a decisive move higher may still be premature, "undervaluation has been trimmed to 0.5% in our short-term fair value model estimates, and the dollar is expensive to sell from a carry perspective. In our view, some soft US data is needed before 1.170 becomes a realistic short-term target for EUR/USD. For now, we expect more range-bound trading. ”


• EUR/USD currently trades within a 1.1579–1.1635 band, just below the October 30th high at 1.1637. The 50DMA and 100DMA remain closely aligned overhead at 1.1662 and 1.1663, respectively.

GBP: GBP/USD +0.2%; 1.3146

• GBP/USD saw modest gains after an initial dip following slightly softer-than-expected UK GDP data (M/M -0.1% vs Exp. 0.0%, Prev. +0.1%), before recovering alongside broader USD weakness.


• BoE pricing turned marginally more dovish (~1bp) in response to the data, though the broader focus remains on the fiscal challenges facing Chancellor Reeves ahead of the November 26th Budget. She will need to strike a delicate balance between fiscal prudence and avoiding measures that could stifle growth or reignite inflation concerns.


• Political uncertainty also lingers over PM Starmer’s leadership, though tensions eased somewhat after the UK Health Secretary dismissed reports of a plot to oust the Prime Minister.


• GBP/USD currently trades within a 1.3101–1.3171 range, with near-term resistance seen at Tuesday’s 1.3184 high and Monday’s 1.3191 peak.

JPY: USD/JPY -0.2%; 154.51

• USD/JPY traded without clear direction overnight, easing after encountering resistance near the 155.00 handle amid a cautious tone in Japan.


• The pair drifted lower through the European session as the dollar softened and broader risk sentiment turned more subdued.


• USD/JPY now trades toward the lower end of a 154.32–155.01 range, comfortably within yesterday’s 154.04–155.04 parameters.

Antipodeans: AUD/USD +0.5%; 0.6570 NZD/USD +0.1% 0.5671

• The Antipodeans diverge, with AUD/USD outperforming after stronger-than-expected labour market data and a decline in the unemployment rate.


• ING remarked, “we expect only one more cut in 2026. The Aussie dollar remains our favourite G10 currency into the new year, and we target a move to 0.68 by mid-2026.”


• The upbeat data briefly lifted AUD/NZD to a 1.1637 high before easing back below the 1.1600 mark (vs earlier low of 1.1534).


• Consequently, NZD/USD lagged its counterpart, struggling to fully capitalise on the broader dollar softness amid the cross-driven AUD strength.

13 Nov 2025 - 10:10- ForexData- Source: Newsquawk