EUROPEAN FX UPDATE: USD choppy amidst early release of weekly jobless claims, JPY digests jawboning

DXY: -0.1%, 99.52

• DXY is currently choppy and trades within a busy 99.39 to 99.58 range. Initial morning action saw the index buoyed by the downbeat risk tone, where the USD was pressured by typical haven currencies such as the JPY & CHF whilst the Antipodeans lagged. Thereafter, the risk tone improved a touch and the Dollar dipped to make a session low – a move which also came amidst a surprise US weekly claims release.


• Do note that the weekly claims release is a delayed report for the w/e Oct 18th; it printed at 232k, whilst continuing claims printed at 1.957mln. For reference, the last release was for the week of the 20th of September at 219k for initial claims; continuing claims were for the week of October 11th at 1.947mln. So whilst there is a gap in the data, the overall theme is suggestive of a deteriorating labour market. It is worth noting that DXY fell from 99.51 to a low of 99.41 in the 15 minutes before newswires picked up the release – a move which has since entirely reversed. Markets now look to Thursday’s September NFP report on Thursday for a more detailed picture on the labour market.


• Data aside, some focus on comments via Fed’s Waller in the prior session. The Governor reiterated his view that he will support a 25bps cut at the December meeting, suggesting that it would provide the labour-market with additional “insurance”. Elsewhere, the POTUS said he expects to issue dividends to Americans based on tariff revenues, probably in the middle of 2026, according to Reuters.


• Looking ahead, ADP will release its weekly US jobs gauge; last week, it reported that its average weekly estimate was -11,250. US factory orders are expected to have risen by 1.4% M/M in August (prev. -1.3%); durable goods revisions for August are also due today. NAHB's housing market index is seen unchanged at 37 in November. Fed's Barr (voter) and Fed's Barkin (2027 voter) are set to speak, while Fed's Logan (2026 voter) will deliver remarks after the close.

EUR: U/C, 1.1590

• EUR is currently flat and largely moving at the whim of the Dollar given the lack of pertinent European newsflow. Initially flat vs the Dollar, then caught a bid to make a fresh session high above the 1.1600 mark – before once again reversing. Bid seemingly in the moments preceding the US jobless claims figures.


• Really not much from a monetary policy perspective, but more focus on trade developments. The UK is reportedly considering options to retaliate against Europe over steel tariffs, with the government working on counter-measures should it fail to secure preferential treatment on EU plans to raise steel-import tariffs to 50% and cut existing quotas by nearly half; the UK is also examining how to accelerate the replacement of its own steel safeguards, due to expire in June next year, so it can introduce its own tightened import quotas, according to Bloomberg citing sources.

JPY: U/C, 155.20

• JPY is also flat vs the USD, but began the European session a little firmer, having benefited from the subdued risk tone seen overnight. That downbeat sentiment has remained this morning, with equities continuing to reside firmly in the red – albeit have stabilised just off worst levels. For Japan specifically, a number of key sticking points; 1) a meeting between BoJ Governor Ueda and PM Takaichi, 2) China-Japan tensions, 3) ongoing verbal intervention.


• It is interesting that the upside today for JPY is capped, despite the ongoing slump in global stocks; and continued verbal intervention via Finance Minister Katayama has failed to materially boost the Yen today – though did help strengthen it briefly overnight; she said that she is alarmed over FX moves. Thereafter a readout of the meeting between Ueda and Takaichi, where the discussion focused on fiscal and monetary policy. Interestingly, the pair spoke about FX, but did not go into details. Some of the strength in the JPY is ultimately capped by the ongoing China-Japan tensions. In brief, tensions flared up after PM Takaichi said that a Chinese invasion of Taiwan could threaten Japan and trigger a military response. China has recently cancelled flights to Japan, citing safety concerns for its own citizens. The mood appears to be stabilising, however, with diplomatic talks scheduled – should some progress be made, the Yen may find ground to strengthen on haven/jawboning factors.

GBP: U/C, 1.3152

• GBP is steady vs the USD, but as above, was subject to some two-way action surrounding the US jobless claims data. Currently trading in a 1.3146 to 1.3176 range. Focus for the day will be on commentary from BoE's Pill and Dhingra this afternoon, and then will shift to the UK's inflation report on Wednesday. A dataset which has heightened focused, given BoE Governor Bailey highlighted inflation developments at the most recent confab - he is likely to be the deciding vote ahead in December; markets currently assign a 79% chance of a 25bps reduction at that meeting.


• More pertinent for the GBP are budget-related updates. Most recently, The Telegraph reported that UK Chancellor Reeves is reportedly considering a last-minute raid on banking profits in the budget. This would be a politically favourable move, but perhaps overshadowed by the growth-related implications of such a move, and boost concerns re. the UK’s investment attractiveness.

Antipodeans: AUD U/C, NZD +0.1%

• Antipodeans were initially the clear underperformers vs the USD overnight and into the European morning – though as the session progressed, that move has since stabilised. AUD is essentially flat and trades within a 0.6466 to 0.6499 range whilst the Kiwi is marginally firmer and trades within a 0.5639 to 0.5669 range.

18 Nov 2025 - 10:10- ForexEU Research- Source: Newsquawk