Analysts are almost unanimously confident that the Fed will cut the interest rate by 25 basis points to 4.00%. The probability of a more aggressive easing has increased but is still not considered the main scenario. Officials are expected to adopt a dovish tone in their statements as U.S. inflation growth came in weaker than forecast.
It is also possible that the Fed will announce the end of its quantitative tightening (QT) program amid growing liquidity concerns in the banking sector. Notably, the meeting is being held without access to complete economic data due to the government shutdown. For example, the September employment report — a key factor influencing previous rate decisions — was never released. The White House has warned that by November 15, salary payments to military personnel could be delayed, while airlines may face operational issues during the upcoming Thanksgiving travel rush.
Amid the ongoing shutdown, President Donald Trump’s approval rating has dropped sharply: only 43.8% of respondents currently approve of his performance, while 53.1% disapprove. Tomorrow at 11:00 (GMT+2), Germany will release its Q3 GDP data — forecasts suggest no quarterly growth after a –0.3% decline previously, while annual GDP may improve from 0.2% to 0.3%.
At the same time, similar statistics for the euro area as a whole will be published. Analysts expect annualized GDP to slow from 1.5% to 1.2% and quarterly growth to rise by just 0.1%. Although the European Central Bank (ECB) has succeeded in curbing inflation, stagnation risks remain. Business activity growth is mainly driven by higher government spending on defense and infrastructure, while political instability persists in several EU countries — particularly in France, where budget negotiations for 2026 are expected to be contentious.
GBP/USD
The British pound is trading near 1.3235 against the U.S. dollar, holding steady as traders await new catalysts. The main focus remains on the Fed’s rate decision at 20:00 (GMT+2). According to the CME FedWatch Tool, over 97% of analysts expect another 25 basis-point cut to 4.00%.
While a deeper rate cut is not ruled out, such a move is unlikely to be seriously considered today since the Fed lacks complete macroeconomic data due to the ongoing shutdown, which could continue through late November if the Senate fails to reach a bipartisan agreement.
In the UK, investors are watching today’s consumer credit data, due at 11:30 (GMT+2). Forecasts suggest a decline in net consumer lending from £6.0 billion to £5.5 billion in September, and a slight drop in approved mortgage applications from 64.68K to 64.50K.
Meanwhile, the British Retail Consortium (BRC) reported a slowdown in retail sales growth from 1.4% to 1.0% in October, indicating easing inflationary pressure and strengthening expectations for a future Bank of England rate cut. In contrast, U.S. housing price data showed a 0.4% monthly increase versus forecasts of 0.1%, though the annual rate fell from 1.8% to 1.6%.
AUD/USD
The Australian dollar is strengthening, testing 0.6600 as short-term bullish sentiment builds, supported by stronger-than-expected inflation data. Australia’s annual CPI accelerated from 2.1% to 3.2% in Q3, beating forecasts of 3.0%, while quarterly inflation rose from 0.7% to 1.3%. Core CPI, tracked by the Reserve Bank of Australia (RBA), climbed from 2.7% to 3.0% year-over-year and from 0.7% to 1.0% quarterly — again exceeding projections.
This gives the RBA reason to keep policy unchanged, which supports the AUD. At the same time, markets expect the Fed to cut its rate by 25 basis points today, and traders are looking for dovish signals that could strengthen expectations of another reduction in December.
Additional support for the pair comes from optimism over a potential U.S.–China trade truce. Earlier this month, Washington announced tariffs of up to 100–150% on Chinese goods in response to Beijing’s restrictions on rare-earth exports. The long-awaited meeting between U.S. President Donald Trump and Chinese President Xi Jinping is scheduled for tomorrow at the APEC summit.
USD/JPY
The U.S. dollar is trading sideways near 152.00 against the Japanese yen, with volatility subdued ahead of the Fed meeting. Analysts widely expect a 25-basis-point rate cut to 4.00%.
Traders will be watching Jerome Powell’s remarks for signs of a more dovish policy stance, particularly after softer inflation data showing annual CPI rising slightly from 2.9% to 3.0%, while the core rate slowed from 3.1% to 3.0%. The Bank of Japan will meet tomorrow, with most analysts expecting no change to its 0.50% benchmark rate. However, given Prime Minister Sanae Takaichi’s preference for loose monetary policy, pressure may soon mount on the BoJ to maintain its accommodative stance even longer.
XAU/USD
Gold (XAU/USD) is consolidating around 3950.00 ahead of the Fed’s announcement at 20:00 (GMT+2). Analysts unanimously expect a 25-basis-point rate cut to 4.00%, but the market’s main focus is on Powell’s comments.
The prolonged U.S. shutdown continues to disrupt key economic reporting, while political tensions rise. Senator Chuck Schumer warned that if the shutdown continues into November, public discontent will increase as federal employees remain unpaid. The White House has also warned of possible disruptions to military salaries, which could weigh on President Trump’s approval ratings. Schumer believes this may pressure Republicans to compromise on the fiscal 2026 budget. Meanwhile, markets remain cautious ahead of the Fed’s decision, which could signal the end of quantitative tightening and further liquidity measures.