EUROPEAN FX UPDATE: USD is modestly firmer into NVIDIA/FOMC Minutes, JPY hit post-Katayama

DXY: +0.1%, 99.71

• DXY is a little firmer and trades within a narrow, but fairly busy, 99.49 to 99.75 range. Sentiment continues to remain tentative ahead of the key risk events today (NVIDIA/FOMC Minutes) and into September’s NFP report on Thursday. G10s are currently broadly flat/lower vs the USD, with clear underperformance in the Antipodeans. It is interesting to note that FX havens have not really caught a material bid in recent days, despite the risk tone. Reasons for this include outperformance in the Swiss Franc after it rose to a 10-year high in the prior week (vs EUR), amidst US-Swiss trade developments, whilst the JPY remains subject to fiscal woes and China-Japan geopolitical tensions. For Japan specifically, recently markets digested speak via Finance Minister Katayama (see below) – comments which pressured the JPY, lifted the USD and hence weighed on G10 peers across the board.


• On the Fed, US Treasury Secretary Bessent said US President Trump may announce the next Fed Chair before Christmas, via Fox News. The President said he has begun interviews for Fed Chair and would love to remove Powell immediately, adding he thinks he already knows his choice; he said there are some surprising names under consideration but he may go the standard route, and noted that people are holding him back from firing Powell, according to Reuters.


• Back to today for the docket, the Federal Reserve’s upcoming minutes are expected to show how divided policymakers were over October’s 25bps rate cut to 3.75%-4.00%, which drew one hawkish and one dovish dissent. Chair Powell said the vote was “strong” but acknowledged sharp differences over the outlook, stressing that a December cut is not assured. Elsewhere, Fed speak via Barr and Barkin is due this afternoon – we are guided to a text release.

EUR: -0.1%, 1.1570

• EUR is flat/mildly lower vs USD and trades within a narrow 1.1566 to 1.1597 range, stopping just shy of the round 1.1600 mark; a low for the day which marks a fresh WTD trough, but towards the midpoint of last week’s confines. EZ HICP Final Metrics were left unrevised – no move on the report.


• In geopolitics, the Trump administration has been secretly working in consultation with Russia to draft a new plan to end the war in Ukraine, according to Axios sources. It was recently reported that the Ukrainian delegation has arrived in Turkey, awaiting ahead of its meeting with US Special Envoy Witkoff – Russia is not in attendance, but will be relayed any positive developments.

USD/JPY: +0.3%, 155.94

• Overnight, USD/JPY traded choppily within a tight range, with the yen showing modest strength as risk sentiment in Japan and South Korea deteriorated. Into the morning, the JPY scaled back that strength to trade modestly lower vs the USD, ahead of a meeting between BoJ Governor Ueda and Japanese Finance Minister Katayama. To put this meeting in some context, Japan’s bond yields hit multiyear highs overnight on fears a roughly JPY 17tln stimulus package under PM Takaichi will strain already weak public finances.


• At the time of writing, Japanese Finance Minister Katayama continued to provide some remarks following her meeting with Ueda. She highlighted that the meeting focused on maintaining a close BoJ-Government coordination, with the largest bout of pressure for the JPY seen following remarks that there was “no specific discussion on FX”. This broke the Yen out of its overnight range to make a fresh session high just shy of the 156.00 mark at 155.98 (vs low of 155.22); EUR/JPY has lifted to a fresh ATH at 180.43. As a reminder, there has been continued and sustained verbal intervention from several Japanese officials in the past couple of weeks. No specific “line in the sand” provided in terms of intervention itself, but analysts suggest that areas between 155-160 is unlikely (for USD/JPY), but moves above that round 160.00 mark could spark some intervention.


• Elsewhere, in the midst of all these fiscal-related developments, focus has been on heightened geopolitical tensions between China and Japan. The Chinese Government reportedly issued a renewed ban on Japanese seafood imports – though, China suggested it was in relation to monitoring of treated water release from the Fukushima nuclear plant.

GBP: -0.2%, 1.3120

• GBP is modestly lower today, in the aftermath of the region’s UK inflation report. Delving into the data, headline CPI Y/Y and M/M printed in-line with expectations, and cooled a touch from the prior whilst Services was cooler-than-expected.


• Overall, data which really doesn’t change much for policymakers at the Bank – and this has been reflected by the lack of repricing in markets, which still assign a 84% chance of a cut. Some interesting analyst views following the release: ING see the report as continued “sticky” inflation in the UK, whilst Pantheon Macro suggests that the data leaves a December cut as “nailed-on”.


• Governor Bailey, who cast the tie-breaking vote last time around, made clear in the statement & press conference that, in terms of the next cut, the BoE generally but Bailey in particular, is highly inflation contingent. As such, the as-expected moderation will push Bailey towards a December cut; however, it is too soon to say for sure, given the uptick in food inflation and the stickiness of various components. Additionally, we await next week's budget and then the November inflation print just before the December announcement for further insight.

Antipodeans: AUD -0.3%, NZD -0.5%

• Antipodeans trade lower overnight, amidst the subdued risk tone – price action which has continued to play out into the European session. The Kiwi sits at the foot of the G10 pile, closely joined by the Aussie; NZD/USD is currently at the bottom end of a 0.5622 to 0.5661 range.

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