The positive momentum could persist this week as the news backdrop is unlikely to change materially: the government shutdown continues, preventing investors and analysts from accessing up-to-date macro data. On Wednesday at 15:15 (GMT+2), the Automatic Data Processing (ADP) employment report will be released, offering a read on labor-market conditions that strongly influence the Federal Reserve’s policy decisions. In addition, Fed Chair Jerome Powell said officials should show restraint regarding a rate adjustment at the December meeting.
The chart above shows the probabilities of a Fed rate change at the December 10, 2025 meeting, according to the CME FedWatch Tool.
- 67.1% of market participants expect the rate to be cut to 3.50–3.75%,
- while 32.9% expect it to remain at 3.75–4.00%.
Thus, most investors assume further monetary easing toward year-end, especially given signs of labor-market cooling and the ongoing U.S. government shutdown, which delays key economic releases.
Taken together with Powell’s call for caution at the December meeting, the market is pricing a higher probability of a moderate rate cut, which in turn supports U.S. dollar strength against the euro, the pound, and the yen.
Eurozone
The euro is falling against the pound, the dollar, and the yen.
The single currency’s neutral tone comes alongside business-activity data: in October, the manufacturing PMI rose from 51.5 to 52.1 in Spain, from 49.0 to 49.9 in Italy, and from 48.3 to 48.8 in France. Germany held at 49.6 after a prolonged downtrend. As a result, the aggregate eurozone reading settled at the 50.0 “green” threshold. Given favorable inflation data, European Central Bank (ECB) officials may continue easing policy in the near term.
United Kingdom
The pound is declining against the U.S. dollar but rising versus the yen and the euro.
The downside comes despite today’s macro releases: in October, manufacturing output grew for the first time in a year as firms reduced backlogs and rebuilt inventories. Seasonally adjusted, the S&P Global Manufacturing PMI accelerated from 46.2 to a 12-month high of 49.7 amid improvements in new orders, employment, and inventories, while delivery times and output volumes were broadly unchanged.
Japan
The yen is strengthening against the euro but weakening versus the U.S. dollar and the pound.
The currency remains broadly neutral amid a trading break for Culture Day and the Bank of Japan’s decision to keep the policy rate at 0.50%. According to the statement, the stance is justified by pressure from U.S. import sanctions and unstable domestic macro indicators, though some experts argue the BoJ’s posture also reflects the rhetoric of new Prime Minister Sanae Takaichi, a proponent of easy monetary policy and expansive external finance. On the other hand, inflation continues to quicken, reaching 2.8% in core terms, pointing to a need for a rate adjustment in the near future.
Australia
The Australian dollar is rising against the euro, the yen, the pound, and the U.S. dollar.
Investors and FX traders remain optimistic after talks between U.S. President Donald Trump and China’s President Xi Jinping in South Korea, which produced a one-year agreement that lowers the risk of new destabilizing factors in bilateral trade. In addition, Australian building approvals in September jumped from –3.6% to a yearly high of 12.0% m/m, and from –0.7% to 12.4% y/y, supporting the currency.
Oil
Oil prices are correcting higher, trading just below the key 65.00 level following yesterday’s OPEC+ decision: members undertaking voluntary cuts will increase output in December by 137.0 thousand barrels per day, but from January through March the group will fix production at 33.292 million bpd due to seasonal factors and compensation for prior overproduction. Kazakhstan faces the largest compensation: its quota will be 126.0 thousand bpd in December, 198.0 thousand bpd in January, 306.0 thousand bpd in February, and 456.0 thousand bpd in March. The total compensation by all participants from January to March will amount to 1.440 million bpd.
